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What is the effect of corporate actions on Futures and Options?

Corporate actions such as stock splits , bonus issues, and rights issues lead to adjustments in F&O contracts to maintain neutrality. These adjustments may include.

Strike Price: Adjusted proportionally.
Lot Size: Changed to reflect the corporate action.
Contract Value: Remains unchanged post-adjustment.

For instance, in a stock split, the strike price is reduced, and the lot size is increased accordingly.

Last updated: 2 Months Ago

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