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Dividends and Fair Value
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Dividends and Fair Value

HOW IT WORKS

To be eligible to receive the dividends, clients must hold a CFD position in respect of the relevant equity or index on the ex-dividend date. The CFD can then be sold at any point after the market opens on the ex-dividend date and still receive the dividend payment.

The equity and index markets may be subject to a dividend adjustment as to refect that the underlying asset will open at a lower level post-dividend date Ex-dividend will be credited or debited on positions held at 5pm EST.

A dividend adjustment is credited to long or buy CFD positions

A dividend adjustment is debited to short or sell CFD positions

Note:

AUGS will process dividend adjustment 1 day prior to ex-dividend date. Long positions receive net of tax dividends while short positions pay gross dividend. Dividend adjustments for non - UK equites vary on local tax arrangements, please contact our trading desk for more information.

FAIR VALUE:

For some cash markets, fair value adjustment may be applied where the underlying futures price will be adjusted for fnancing, dividends, storage and other adjustments.

INDEX CFD DIVIDEND CALCULATION

Dividend adjustments to cash index CFD trades apply as follows: Buy or Long trades are credited with the number of points by which the index concerned has been adjusted x trade size.

Sell or Short trades are debited with number of points by which the index concerned has been adjusted x trade size.


Note: The DAX 30 index is not subject to adjustments; it is a total returns index and as such all ex-dividends are automatically refected in the price.


Formula: d = p x n

d = dividend

p = position

n = number of index points (dividend amount)

Example: Long 10 CFDs of US30 with a dividend at 8 index points. d = 10 x 8 = $80 (credited)

Example: Short 10 CFDs of UK100 with a dividend at 5 index points d = 10 x 5 = lb50 (debited)