Wipro (₹320.10) announced an interim dividend of ₹6 last week. The face value per equity share is ₹2. The dividend will lead to necessary adjustments in the futures and options (F&O) contracts on this stock on the record date.

The company has decided January 28 as the record/ effective date. On this day, the stock price and all derivatives contracts on Wipro will be adjusted appropriately.

With respect to adjustment in futures contracts, the reference rate of the relevant contract on January 27 will be considered. Reference rate will be the mark-to-market settlement price of the relevant futures contract. So, the open positions will be carried forward to January 28 at the daily settlement price on January 27 minus ₹6, the dividend amount.

Suppose the nearest expiry futures (January contract) closes at ₹320 on January 27, it will be revised to ₹314 (₹320 less ₹6). Hence, the contract value will come down.

Likewise, in options, all the strike prices in the option chain of Wipro will be subtracted by ₹6 from January 27. For example, the strike price of 297.50 and 300 will be modified to 291.50 and 294 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.

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