Eurex Clearing Readiness Newsflash | C7: Handling of Corporate Actions – Changes planned for November 2025

Dear customer,

This Newsflash is an early announcement of the changes planned as part of the C7 November Release in 2025 for the handling of corporate actions. 

1.  Harmonization of corporate action processing 

Based on Member demand, Eurex Clearing herewith provides preliminary information relating to changes in the corporate action processing. For November 2025, Eurex Clearing plans to adjust its corporate action processing for Options on stocks (OSTK) aligning it with the processing of other clearing houses in Europe. The handling of corporate actions on single stock future contracts will not be changed.

1.1  Current corporate action processing 

Upon adjustment of OSTK, the capital adjustment ratio (R-factor) is applied to the strike price and the trading unit. To follow the principle of an unchanged contract value, the exercise prices from the adjustment are rounded to the exercise price decimals and the trading unit is rounded to four decimals.

The version number of the adjusted contracts is increased by 1.

This processing might result in a fractional trading unit which remains throughout the lifecycle of the capital adjusted option series. Upon exercise/assignment of the option contract, the Trading Unit Share is physically settled on T+2, and a T+1 cash settlement is done for Trading Unit cash. 

1.2  Future corporate action processing 

In future, the R-factor still adjusts strike prices and trading units, and the version number is increased by 1.

In case the adjustment of the trading unit results in a lot size that is not an increment of one share, the adjusted lot size will be rounded to the nearest whole share. If the unrounded lot size is exactly halfway between two eligible lot sizes, then it shall be rounded up to the next eligible lot size. 

Consequently, only an integer trading unit remains, and no cash adjustment is required anymore alongside the physical settlement of the shares after exercise/assignments. 

Please see some basic examples in the table below: 
 

An equalization payment will be made to neutralize the effect of rounding.  
  
The equalization payment in C7 is calculated as follows: 
 
S = Round [c*((Q2*R)-Q) * no. of contracts] 

whereby:
S = Equalization Payment 
Q = The Lot Size before the corporate action  
Q2 = The Lot Size after the corporate action (rounded) 
R = R-Factor 
c = Series settlement price of the previous day  
  
The equalization payment is calculated on position level and rounded in accordance with the currency decimals. 

The equalization payment will be booked as option premium and will be processed with value date Ex-date +1. 

The following reports document the payments: 

• RPTCA752 Capital Adjustment Positions Overview (on Cum-date) 
• RPTCB790 Premium Information (on Ex-date) 
• RPTCB012 Account Statement (on Ex-date) 

1.2.1 Sample calculation – adjusted trading unit is rounded down 
 
Capital adjustment for a synthetic product ABC with R-factor 0.99289298
  

Calculation of equalization payment on position level:
 
For C ABC SEP21 595.74 1 - in the following sample, the settlement price is assumed to be 15.51 and equalization payment calculation is exemplified for a net long position of 1,000 contracts. 
 
S = 15.51 * ((10*0.99289298)-10) * 1,000 
S = - 1,102.30 EUR
 
If S > 0, then holder of the long position will pay S; holder of the short position will receive S. 

Future booking of tran type 118 with option premium (exemplified for a long position of 3,000 and a short position of 2,000 contracts – net position of 1,000 contracts long): 
 

1.2.2  Sample calculation – adjusted trading unit is rounded up

Capital adjustment for a synthetical product XYZ with R-factor 0.94614844
 

Calculation of equalization payment for a net short position of 1,000 contracts of for C XYZ DEC19 37.85 1: 
 
S = 4.13 * ((106*0.94614844)-100) * 1,000 
S = 1,204.86 EUR  
 
If S > 0, then holder of the long position will pay S; holder of the short position will receive S. 

Future booking of tran type 118 with option premium (exemplified for a net short position of 1,000 contracts):
 

1.3  Report changes 
 
The reports listed below will be modified (layout respectively only content): 
 

1.4  Introduction Strategy 

Eurex Clearing plans to adjust all existing options series with a fractional trading unit by the equalization payment method.

To achieve this, a Corporate Action with R-factor „1“ will be triggered for each option product where contracts with fractional trading units exist on the conversion weekend – date to be announced. This results in a one-off cash settlement of the fractional trading unit for already capital adjusted option series.

In this special case, the version number of the adjusted series will not be incremented by the corporate action and only the trading unit will be changed (rounded up or down to the next integer). An equalization payment will be made to neutralize the effect of rounding.

Afterwards, there will be no OSTK contracts with a fractional trading unit. The advantage of adjusting all affected Stock options on one weekend is to avoid that both methods must be supported, by both Members as well as the Clearing House, in parallel over a longer period.

Further details and the exact conversion weekend will be announced separately with the corresponding release announcement. 

Kind regards, 

Your Client Services Team 

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