Wednesday, May 28, 2008

Closing RPower June Puts

I am closing out the position which I discussed 2 days ago. The June Puts are not really June puts - all futures and options on Reliance Power will expire on May 29 - i.e. tomorrow. On NSE, if one finds the detail on this option, one will still see June 26 as the expiry date. However, there is another section on circulars, where one can find the circular reproduced below. The good thing is - I did not lose money.

What this implies is this - people who have been buying RPower to take advantage of bonus shares have no way to hedge themselves today. There is going to be a rush to short futures after May 30. The right time to short is not today but May 30.



Download Reference No. NSE/CM PT/10634 April 29, 2008

Circular No. NSCC/F&O/C&S/831

Subject: Adjustments of Futures & options Contracts in the security Reliance Power Limited (RPOWER)
In pursuance of Byelaws of NSCCL pertaining to Clearing and Settlement of deals, Circular no NSCC/F&O/C&S/654 dated February 09, 2007 (download reference no CMPT/8498) and Circular No NSE/F&O/052/2008 dated April 28, 2008 members are hereby informed that the settlement of futures and option contracts in the security Reliance Power Limited (RPOWER) on account bonus issue in the ratio of 3:5 shall be as under.

The ex-date in this regard shall be May 30, 2008.

The following action would be taken by the NSCCL in this regard.

1. All existing contracts in the underlying RPOWER i.e. contracts with expiry dates May 29, 2008, June 26, 2008 and July 31, 2008 shall expire on May 29, 2008 and shall be finally settled at the relevant settlement price.

2. The settlement price to be reckoned for the purpose of final settlement shall be the closing price of RPOWER in the Capital Market segment of NSE, on May 29, 2008

3. The details of final settlement in respect of RPOWER shall be available in the F_PS03 and F_PS04 reports downloaded to members on May 29, 2008

4. All positions in the existing futures and options contracts on the underlying RPOWER shall cease to exist pursuant to the final settlement on May 29, 2008

5. The Pay in/pay out of final settlement of all F&O contracts on RPOWER shall be on May 30, 2008 (T+1 day).

For any further clarifications Members may contact the following officials of the Clearing Corporation: Mr.Chinnaraja C and Mr Ganesh Rangaswamy

Phone Nos. 022-26598165 Fax Nos: 26598243

Yours faithfully,

For National Securities Clearing Corporation Ltd.

Rana Usman



Anonymous said...

know thoroghly about f/o before recommending anything, sir...this is not the place to learn on other's money

Anonymous said...

r u a relative of manmohan singh/ chidambaram or bernanke... what CRAP are u writing in the name of analysis... r u trying to learn finance, stock markets, economics by practising in blogs... it would be better if u stop writing immediately. i was just wondering if u are aware that u are just making mockery of the whole finance/economics field along with you. better do some degree in finance and comment on US slowdown.

Anonymous said...

how come ur able to post such stupid comments without any shame!

probably ur used to it from ur childhood.

Anonymous said...

I will visit your blog again next week. if u still continue writing all this crap, then i would have no choice but to bombard ur blog with my comments.

Dont tell me i didnt warn u!


Nice play