Adjustment of Futures and Options contracts in the security AXISBANK

Posted on by Subhendu Sarkar

In continuation of NSE circular reference no. NSE/FAOP/27181 dated 21st July’14 and In pursuance of SEBI guidelines for adjustments to futures and options contracts on announcement of corporate action, the members are informed of the following:

Axis Bank Limited has informed the Exchange that it has fixed July 30, 2014 as the Record Date for the sub-division of the nominal face value of the equity shares of the company from Rs.10 to Rs.2 per equity share. Hence each shareholder would be entitled to receive 5 Equity Shares of Rs.2 each for every 1 Equity Share of Rs.10 each of the Company.

 

Symbol                        : AXISBANK

Stock split ratio           : 10:2

Ex-date                       : July 28, 2014

 

Adjustment factor:

Adjustment factor for Stock split of A: B is defined as (A/B). In the case of AXISBANK, the adjustment factor is (10/2) = 5, since the split ratio is 10:2.

 

Adjustments for Options Contracts:

  1.  Strike Price: The adjusted strike price shall be arrived at by dividing the old strike price by the adjustment factor.
  1.  Market Lot: The adjusted market lot shall be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot would be 1250

 

Adjustments for Futures Contracts:

 

  1.  Futures price: The adjusted futures price shall be arrived at by dividing the old futures price by the adjustment factor.

2.  Market Lot: The adjusted market lot shall be arrived at by multiplying the old market lot by the adjustment factor. The              revised market lot would be 1250.

 

An example for deriving the adjustment factor, revised strike /futures base price and lot size is given in Annexure-1

 

The methodology for position adjustments shall be separately intimated by NSCCL.

The above changes shall be effective from July 28, 2014.

IT Team of Achiievers are hereby advised to load the updated contract.gz file in the trading application before trading on July 28, 2014. This file can be obtained from the directory faoftp/faocommon on the Extranet server.

The details of the revised option strike prices, futures prices and quantity freeze limit will be informed to members separately on July 25, 2014.

                                                                                                  Annexure-1

Option contracts before adjustment:

 

Instrument Symbol Expiry date Strike Type Market Lot
           
OPTSTK AXISBANK 31-JUL-2014 2000 CE 250
           
OPTSTK AXISBANK 31-JUL-2014 2000 PE 250
           
OPTSTK AXISBANK 31-JUL-2014 2050 CE 250
           
OPTSTK AXISBANK 31-JUL-2014 2050 PE 250
           
Options contracts after adjustment:      

 

Instrument Symbol Expiry date Strike Type Market Lot
           
OPTSTK AXISBANK 31-JUL-2014 400 CE 1250
           
OPTSTK AXISBANK 31-JUL-2014 400 PE 1250
           
OPTSTK AXISBANK 31-JUL-2014 410 CE 1250
           
OPTSTK AXISBANK 31-JUL-2014 410 PE 1250
           

Futures contract before adjustment:

 

Instrument Symbol Expiry date Future Base price** Market Lot
         
FUTSTK AXISBANK 31-JUL-2014 2005.10 250
         
Futures contract after adjustment:    
         
Instrument Symbol Expiry date Future Base price# Market Lot
         
FUTSTK AXISBANK 31-JUL-2014 401.00 1250
         

 

The revised strike/futures prices and the lot size on account of adjustment would appear in decimal places. The strike/futures prices shall be rounded off to the nearest tick size and the lot size shall be rounded off to the nearest integer.

# The figure is only an indicative value for the purpose of example.