Vedanta Future price after Dividend announcement

[Lithin_Thomas]

I have 1 lot VEDL SEP Future bought at 302, on 31 Aug 2021. Today on 1st Sep 2021, they announced Rs.18.5 dividend.Ex dividend 9th Sep 2021. The future closed today at 298. As this is more than 5%,extra ordinary dividend, adjustment will take place in future price. I am worried about how the adjustment will take place? Can someone guide at what price will it open tomorrow 2nd sep 2021? What if I sell tomorrow?

[ShubhS9]

As this is an extraordinary dividend. The price of Futures contract will be adjusted on ex-date.

The adjustment is carried out in such a way that the value of the position of the market participants, on the cum and ex-dates for the corporate action, shall continue to remain the same as far as possible.

You can check out this post which explains how the adjustments are made.

Adjustment of F&O contracts in REC Limited

The Board of Directors of REC Limited at its meeting held on November 06, 2020, declared an interim dividend of Rs. 6 per share, the ex-dividend date being November 13, 2020. SEBI has prescribed a framework to the exchanges for adjustment of corporate actions in derivative contracts at the time of the corporate action. The exchange has published everything regarding the adjustments in case of corporate actions here. Accordingly, if a company declares a dividend at and above 5% of the market val…

[Lithin_Thomas]

I was doubtful about dates before ex dividend. Will the future get reduced by 18.5 tomorrow itself? Or is it like that if the future becomes 305 and I exit the buy position at 305, but mtom is calculated as if I sold at 305-18.5, ie 286.5?
Is it like that?

[ShubhS9]

@Lithin_Thomas

I was doubtful about dates before ex dividend. Will the future get reduced by 18.5 tomorrow itself?

No, the adjustment will happen in the ex-date. Not tomorrow.