What is a dividend adjustment?

Posted By Robert On Thursday, February 12th, 2015 With 0 Comments

When dividends are paid on a share in which you have a position, you will see this reflected by a ‘Dividend Adjustment’ on your account. Dividend adjustments are credited to long spread betting and CFD positions and debited from short positions on the ex-dividend date. If you are long, you will be credited with 80% of the dividend and if you are short you will be charged 100% of the dividend.

For example:
If you were long £1 on a share, which is equivalent to owning 100 shares, which went ex-dividend and the dividend was 10 cents per share, you would receive 10 cents x 100 shares x 80% = £8. If you were short by the same amount you would have been charged 10 pence x 100 shares x 100% = £10.

The same adjustment is applied to cash index positions to reflect constituent shares of the index going ex-dividend.

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