What are Index CFD Dividends?
Dividends may impact the amount of overnight costs you pay or earn on your Index CFD position. Index CFD's are made up of a group of stocks that may pay dividends throughout the year. When a dividend is paid on a stock, the value of the stock will drop and therefore so does the value of the index.
Short positions will be positively impacted by the drop in Index Price, while long positions are negatively impacted.
Dividend adjustments are applied on Index CFD products to negate the impact of the drop in Index Price.
How do Dividends Impact my Trade?
If you are long an Index CFD, you are credited a dividend adjustment. If you are short, you will be debited a dividend adjustment.
Let’s provide an example.
You have a short position on SPX500 and hold that position past 5pm EST on the eve of the ex-dividend date of a stock relating to that particular index.
The index price will be adjusted in your favor (based on the size of the dividends paid out and the weighting of the particular stock/s within the Index) and a dividend adjustment will be debited from the account.
Keep in mind that there are other factors that affect the index price and the index may drop more or less than the exact amount of the dividend adjustment.
How can I avoid paying dividends on Index CFDs?
To avoid paying dividends, you can close your position before 5PM EST and the charge would not apply.
Why are long positions credited less than short positions are debited?
The differential is a result of an Friedberg Direct Markup.
Where can I view upcoming dividends?
Upcoming Dividend ranges can be found here and the daily dividend amount can be viewed from the simple dealing rates window in the Trading Station platform in the columns marked "Div S" (For sell/short positions) or "Div B" (For buy/long positions).
Please Note: Upcoming dividends are displayed in the counter currency of the instrument (For e.g if the AUS200 displayed "Div B" 0.23 that would be a credit of 0.23 AUD per contract or if the US30 displayed "Div S" of -1.32 that would be a debit of 1.32 USD per contract)
Where can I view past dividends?
Dividends paid or earned on a specific position can be found in the account statement.
Account statements can be accessed via the "Report" button on the Trading Station platform (Desktop, Web, or Mobile) or by entering www.myfxcm.com using the username for the account you want to run the report on. From the menu, go to My Info->Reports. Fill out each field as desired, and then click on the blue Get Report button.