abhishreshthaa
Abhijeet S
Introduction to Options
Corporate Announcements
In case of a corporate announcement the exchange adjusts the option positions, so that the contract value of the positions on the cum benefit day and the ex benefit day is the same
As per SEBI, if the value of dividend declared is more than 10% of the spot price on the dividend announcement day, then on ex dividend date the strike price of the options is reduced by the dividend amount
If the dividend declared is lower than 10% of spot, then there is no adjustment. Market adjusts option price considering dividend
When a company declares bonus then the lot size and strike price of the stock option is adjusted by the exchange as per the bonus ratio on ex bonus day
Corporate Announcements
In case of a corporate announcement the exchange adjusts the option positions, so that the contract value of the positions on the cum benefit day and the ex benefit day is the same
As per SEBI, if the value of dividend declared is more than 10% of the spot price on the dividend announcement day, then on ex dividend date the strike price of the options is reduced by the dividend amount
If the dividend declared is lower than 10% of spot, then there is no adjustment. Market adjusts option price considering dividend
When a company declares bonus then the lot size and strike price of the stock option is adjusted by the exchange as per the bonus ratio on ex bonus day