Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to the contract terms of all open options contracts on Tencent Holdings’ (Tencent) shares to account for the following share subdivision:
Highlights of the adjustment arrangements for Tencent options contracts are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
|
Stock Name (Stock Code) |
Tencent Holdings Limited (700) |
|
Corporate Action |
Every share will be subdivided into 5 subdivided shares |
|
Effective date |
15 May 2014 |
For details of the share subdivisions, please refer to the announcement by Tencent on 19 March 2014.
Adjustment Procedures
Adjustments will be made to the open positions which exist after the market close on the business day immediately before the Effective Date. The adjustment procedures are as follows:
|
Adjustment Term |
Formula |
Remarks |
|
Adjustment Ratio (AR) |
1 Share / 5 Subdivided Shares = 0.2000 |
Rounded to the nearest |
|
Adjusted Exercise Price (AEP) |
Exercise price of outstanding option series x AR |
Rounded to the nearest |
|
Adjusted Contract Size (ACS) |
Exercise price of outstanding option series x |
Rounded to the nearest |
Trading of Adjusted and Standard Contracts
After the market close on the business day immediately before the Effective Date, the open positions will be transferred to the adjusted option series. In addition, new option series based on the standard contract size will be introduced for trading on the Effective Date. Details of the adjusted and standard contracts available for trading on and after the Effective Date are shown below:
|
Contract |
Trading Symbol |
Contract Size |
Availability For Trading |
Addition of New Option Series on and after |
|
Adjusted |
TCA |
500 |
From Effective Date to |
No |
|
Standard |
TCH |
100 |
From Effective Date onwards |
Yes |
Investors should note that the adjusted and standard option series have different contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
