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Vedanta Futures and Options Contracts Adjusted Due to Dividend

22 May 20243 mins read by Angel One
VEDL futures and options contracts will be adjusted by NSE Clearing Limited for a Rs. 11 dividend. These changes will affect settlement prices and strike prices.
Vedanta Futures and Options Contracts Adjusted Due to Dividend
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

NSE Clearing Limited has announced adjustments to the futures and options contracts for Vedanta Limited (VEDL). These adjustments are in response to the declared dividend and will take effect on the last cum-dividend date, May 23, 2024.

On May 23, 2024, the futures contracts for VEDL will be marked-to-market based on the daily settlement price, reduced by the dividend amount of Rs. 11. The adjusted carry-forward value will then form the basis for margin calculations from May 24, 2024, the ex-dividend date.

Example

Before Adjustment (on May 23, 2024):

  • You bought 1 lot of VEDL futures, which is 2300 shares, at Rs. 440 each.
  • At the end of the day, the market closes with a daily settlement price of Rs. 445.
  • Your mark-to-market profit is calculated as the difference between the settlement price and the purchase price.

Profit per share:Rs. 445 – Rs. 440 = Rs. 5

Total profit: 2300 shares * Rs. 5 = Rs. 11,500

Adjustment on May 24, 2024:

  • On this day, your position from May 23 will be adjusted to account for the Rs. 11 dividend.
  • The adjusted price will be Rs. 445 – Rs. 11 = Rs. 434.
  • If the closing price on May 24 is Rs. 440:

Profit per share: Rs. 440 – Rs. 434 = Rs. 6

Total profit: 2300 shares * Rs. 6 = Rs. 13,800

In this way, your position is adjusted to reflect the dividend payout.

Options Contracts Adjustments

The entire dividend amount of Rs. 11 will be subtracted from all cum-dividend strike prices on the ex-dividend date. All existing positions at current strike prices will be carried forward to the new adjusted strike prices.

Lot Size Consistency

The lot size of the futures and options contracts will remain the same despite these adjustments. 

These changes ensure that the dividend payout is accurately reflected in the value of the futures and options contracts for Vedanta Limited, maintaining fairness and accuracy for all investors involved.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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