Dividend payments for CFD on shares

CFD's holders unlike the real shareholders don't get dividends as they are . When you trade CFD, and have open positions, there is so called «Dividend Adjustment», which takes place on ex-dividend date. Long position ("bought") means that the amount is credited, short position ("sold") means that the adjustment amount is deducted. The basis for dividend adjustment equals a dividend per one share.

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  Example

  On 8 March 2004 (Declared Date) Board of Directors of Verizon Communications (VZ) declares of the payment of quarterly dividends at the amount of 0.385 USD/per share:

  • Ex-Date - 06.04.2004;
  • Record Date - 09.04.2004;
  • Pay Date - 03.05.2004.

  • 1. if there is a long position per 1 lot (100 shares) on 6 April, the trading account of CFD's holder will be credited: 100 х 0.385 = 38.5 USD;
  • 2. if there is a short position per 1 lot (100 shares) on 6 April, the account will be deducted 38.5 USD.

  Withdrawals and deposits will be in April 6.

The table below shows the date of dividend distribution for the companies which shares are the basic asset for Contracts for Difference (CFD):

Note:

• Ex- Date - those investors who bought shares before this date have the right to get dividends;
• Record Date - the day of dividends distribution among the shareholders;
• Payment Date - the day when the cheques for the dividends are sent by post or transferred to the shareholders' banks accounts.