BONUS IN GAIL LTD.: IMPLICATIONS ON YOUR F&O POSITIONS

GAIL Limited has fixed a Record Date of September 7th, 2022 for the purpose of bonus shares in the ratio 1:2 i.e. One new bonus equity share of Rs. 10/- each for every Two existing equity shares of Rs. 10/- each fully paid up. The ex-date being September 6^th 2022.

What will happen to F&O open positions in GAIL LTD.?

All your open positions in futures & options contracts will be adjusted end of day on September 05, 2022.

What is adjustment factor in GAIL LTD?

Adjustment factor for Bonus issue of A: B is defined as (A+B)/B. In the case of GAIL LTD, the adjustment factor is (1+2)/2 = 1.5 since the bonus issue ratio is 1:2.

What will be the new price & lot size for futures?

New price- Adjusted futures price shall be settlement price of relevant futures contracts on September 05, 2022 divided by ‘adjustment factor’ i.e. 1.5.

Lot size- The adjusted market lot will be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot size would be 9150.

What will be the new Strike price & lot size for Options?

Strike Price: The adjusted strike price will be arrived at by dividing the old strike price by the adjustment factor i.e. 1.5.

Lot Size: The adjusted lot size will be arrived at by multiplying the old market lot by the adjustment factor. The revised lot size would be 9150. 

What is the margin required for revised GAIL contracts?

Margin will be as per the exchange rule of SPAN plus Exposure.

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