DIVIDENDS FOR CASH INDICES AND SHARES CFDS
What is a Dividend?
A dividend is a distribution of a company’s earnings to its shareholders and owners, usually in the form of cash payment. When a company generates profits, those profits can be either paid out to the shareholders as a dividend or reinvested back in the business.
How a dividend affects the price of the Cash Index or Share CFD?
When a company pays out a dividend, the price of its share will fall by the amount of the dividend on the ex-dividend date. The Index that includes the underlying company will also decrease by the equivalent weighted average value of the same dividend.
How to calculate Dividends?
Traders who hold a long position will receive the dividend amount, calculated as follow:
Lots x Contract Size x Dividend Adjustment
Traders who hold a short position will pay the dividend amount, calculated as follow:
Lots x Contract Size x Dividend Adjustment
How my position will be affected from the Dividend adjustment?
easyMarkets will handle the dividend adjustment using the swaps mechanism.
Example:
Let’s assume the below:
1) There is an upcoming dividend adjustment of 1.5 USD for US Tech Index. Hence the price of the index is expected to fall on the ex-dividend date.
2) The closing rate of the Index before the ex-dividend date is 12500.00.
3) Assuming no other market forces, the Index will open at 12498.5 on the ex-dividend date.
The daily swaps values of the Index for the current week are:
MT4/MT5 Swap Long: - 2.46
MT4/MT5 Swap Short: + 0.72
easyMarkets proprietary platform/App Swap Long: - 0.0197%
easyMarkets proprietary platform/App Swap Short: + 0.0058%
On the day before the ex-dividend date, the swaps for the Index will be adjusted as follow:
MT4/MT5 Swap Long: -2.46 + 1.50 = - 0.96
MT4/MT5 Swap Short: +0.72 – 1.50 = - 0.78
easyMarkets proprietary platform/App Swap Long: -0.0197% + (0.012%) = - 0.0077%
easyMarkets proprietary platform/App Swap Short: +0.0058% - (0.012%) = - 0.0062%
* In our proprietary platforms Swap is named as Rolling fee
** Islamic accounts trading a share or a cash index on ex-dividend date, the dividend amount will be added or deducted directly from their balance
When are the upcoming dividend adjustments?
This Week
Swipe
Instrument
Monday
18/11
18/11
Tuesday
19/11
19/11
Wednesday
20/11
20/11
Thursday
21/11
21/11
Friday
22/11
22/11
US 500
1.12
0.08
0.18
0.91
0.25
US 30
23.85
-
-
5.1
-
US Tech
1.9
0.2
-
3.82
0.32
UK 100
-
-
-
5.59
-
Germany 40
-
-
-
-
-
EU Stocks 50
6.88
-
-
-
-
Swiss 20
-
-
-
-
-
Australia
-
-
0.37
-
0.46
Japan 225
-
-
-
-
-
Hong Kong 50
5.63
-
-
-
-
China 50
-
-
-
-
-
France 40
-
-
-
-
-
Italy 40
-
-
-
-
-
Spain 35
-
0.63
-
-
1.98
CVX
1.63
-
-
-
-
MSF
-
-
-
0.83
-
