Short Take: BSE F&O Contract Adjustments

BSE (₹7,285*) has announced a bonus with a ratio of 2:1. So, the adjustment factor will be 3. The split 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 23 as the record/effective date. On this day, the stock price and all derivatives contracts on BSE will be adjusted appropriately.

With respect to adjustment in futures contracts, the reference rate of the relevant contract on May 22 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 to May 23 at the daily settlement price on May 22 divided by 3, the adjustment factor.

Suppose the nearest expiry futures closes at ₹7,500 on May 22, it will be revised to ₹2,500 (₹7,500 divided by 3). Also, the lot size will become thrice from current 125 shares to 375 shares per contract. Hence, there won’t be any change in the contract value.

Likewise, in options, all the strike prices in the option chain of BSE will be divided by 3 from May 23. For example, the strike price of 7,000 and 7,250 will be modified to 2,333.35 and 2,416.65 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.

Published on May 17, 2025