Corporate Actions
Bonus, mergers, stock splits and more
Impact of Dividends on Stocks:
Dividends can affect stock prices directly. When a dividend is announced, the stock price generally rises, but it often falls after the ex-dividend date. Typically, the stock price drops by approximately the amount of the dividend. The size of the dividend, the company's financial health, and market conditions all influence how the stock price moves.
Impact of Dividends on F&O (Futures & Options):
The adjustment in F&O contracts depends on whether the dividend is classified as ordinary or extraordinary. If the dividend is below 2% of the market value of the underlying stock, it is considered ordinary, and no adjustment is made to the strike price. If the dividend exceeds 2%, it is considered extraordinary, and adjustments are made to both the strike price of the F&O contract and the futures price.
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