Oracle Financial Services Software (OFSS) (₹7,800) announced an interim dividend of ₹240 per equity share of face value ₹5 for the financial year 2023-24. This will lead to necessary adjustments in the futures and options (F&O) contracts on this stock on the record date.

The company has decided May 7 as the record/effective date. On this day, the stock price and all derivative contracts on OFSS will be adjusted appropriately.

With respect to adjustment in futures contracts, the reference rate of the relevant contract on May 6 will be considered. Reference rate will be the mark-to-market settlement price of the relevant futures contract. So, the open positions shall be carried forward at the daily settlement price on May 6 less the dividend amount of ₹240.

For example, if the nearest expiry futures close at ₹7,800 on May 6, it will be revised to ₹7,560 (₹7,800 minus ₹240). Accordingly, the contract value will come down from ₹7,80,000 to ₹7,56,000 (lot size of OFSS is 100 shares).

Likewise, in options, all the strike prices in the option chain of OFSS will be subtracted by 240 from May 7. For example, the strike price of ₹7,400 and ₹7,500 will be modified to ₹7,160 and ₹7,260 respectively.

That said, the above measures are not likely to impact the overall trend of this stock. So, traders can stick to their views and are only required to note the changes in the contracts that they hold.

Related Topics
comment COMMENT NOW