Which Corporate Actions affect F&O contracts?

Which Corporate Actions affect F&O contracts?

The following corporate actions typically lead to adjustments in derivatives contracts:
Stock splits
Bonus issues
Extraordinary (special) dividends
Rights issues
Mergers and demergers
Capital reduction
Regular cash dividends generally do not result in adjustments unless classified as extraordinary.
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      A) Dividends Dividends are payments made by a company to its shareholders. • If the dividend is less than 2% of the stock price → No adjustment • If the dividend is 2% or more (extraordinary dividend) → Strike price and futures base price may be ...
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      No. Adjustments are designed to neutralize the financial impact of corporate actions. While contract specifications may change, the net economic exposure and P&L remain unchanged.
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      Corporate actions are actions taken by a company that directly impact the shareholders' value. These events bring material changes to a company and affect its stakeholders. Corporate actions can be monetary, such as dividends, or non-monetary, such ...