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What is a Dividend? How Do Dividends Relate to CFD Trading and How Do I Calculate the Charge?

What is a Dividend? 

A dividend is an amount of company profit chosen to be sent back to the company’s shareholders.

How do Dividends Relate to CFD Trading? 

When trading on an Index CFD product (such as US30 or US100) the price represents an Index of underlying share prices from the group of companies that make up these products.

Therefore when Dividends are paid on these underlying shares to the shareholders of these companies an adjustment will occur on open positions of the Index CFD that you are trading.

At Valutrades, Dividend values are directly received from our underlying liquidity providers.

Dividends will only be paid or charged to our Index CFD symbols. (Please refer to this page to see which CFDs we offer: https://www.valutrades.com/en/trading-products).

Dividends will be paid or charged when you hold a position on a CFD symbol past the end of day (time 24:00 GMT+2). Dividend values are credited when you are long (buy) the Index price, and debited when you are short (sell) the Index price.

If you are choosing to trade CFD products you should monitor Dividend charges via your client area: https://client.valutrades.com/dividends

Here you will also be able to monitor historical Dividends charged on CFD products.

How to calculate Dividend charges:

Calculation: Dividend Charge/Credit = (MetaTrader Volume traded x Dividend Amount)

Example 1:

Dividend shown on client area:

image-2021-02-17-22-08-31-952

Trade of 0.66 lots of US30 (SELL/Short Position):

Dividend amount as shown on client area for US30 sell is -107.25 per 1 lot.

MetaTrader Volume traded (0.66) x Dividend amount (-107.25) = Dividend Charge/Credit (-70.79 USD).

Therefore 70.79 USD would be deducted from your trading account.

 

Example 2:

image-20210217-174453

Trade of 0.50 lots of STOXX50 (BUY/long position):

Dividend amount as shown on the client area for STOXX50 buy is +6.45 per 1 lot.

MetaTrader Volume traded (0.50) x Dividend amount (+6.45) = Dividend Charge/Credit ( +3.26 EUR).

Therefore 3.26 EUR would be credited to your trading account.

If your account currency is not EUR then the EUR amount will be converted to your account currency.

 

Your account will be charged dividends for SELL/Short positions and credited dividends for BUY/Long positions

 

If you have any additional questions please do not hesitate to contact our support team via live chat, email (support@valutrades.com) or phone (+442031410888).