capitalspreads
Experienced member
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hi all
Dividends.
some misconception here.
There are no dividends payable in SpreadBets (if there were you would have to pay tax on it!!)
D4F quote a daily share price which effectively expires every day and reopens the next day with a small interest rate cost.
If you are long of a share, via a spreadbet, over the dividend date CMC 'refund' the dividend to you otherwise you would lose money because the share price (the bet quote) will drop by the amount of the dividend (or thereabouts) on ex div date. And the opposite if you have a short position (they will take money out of your account) as otherwise you would have made a profit on the susequent fall in the share price.
The quarterly prices quoted by the other SB companies already have these dividends adjusted into the price.
The best way to look at this is by imagining you own 5000 shares in a high value share (XYZ plc) with a dividend of say 60p going ex div on 22nd of the month and (as a hedge) you are short of the corresponding amount via a CMC spread bet (£50)
21st
share price XYZ 35.00-35.02
CMC bet price 35.00-35.02
22nd
share price XYZ 34.40-34.42
CMC bet price 34.40-34.42
in the case of the actual share you would have the dividend to recompence for the loss in share value but, unless D4F made some adjustment you would have also made 58 x 50 =£2900 by the fact of the share price falling by the dividend amount.
So on the 22nd CMC will quote the new price but will adjust your account to take this into the calculation.
All the SB companies use this method in one form or another, it is one of the perenial problems (keeping on top of every single dividend) for SB companies and the main reason that they have the rider in their terms and conditions concerning whether they have the right to renage on prices that do not reflect the correct market value. (generally because a trader has missed a dividend)
Hope this helps
Dividends.
some misconception here.
There are no dividends payable in SpreadBets (if there were you would have to pay tax on it!!)
D4F quote a daily share price which effectively expires every day and reopens the next day with a small interest rate cost.
If you are long of a share, via a spreadbet, over the dividend date CMC 'refund' the dividend to you otherwise you would lose money because the share price (the bet quote) will drop by the amount of the dividend (or thereabouts) on ex div date. And the opposite if you have a short position (they will take money out of your account) as otherwise you would have made a profit on the susequent fall in the share price.
The quarterly prices quoted by the other SB companies already have these dividends adjusted into the price.
The best way to look at this is by imagining you own 5000 shares in a high value share (XYZ plc) with a dividend of say 60p going ex div on 22nd of the month and (as a hedge) you are short of the corresponding amount via a CMC spread bet (£50)
21st
share price XYZ 35.00-35.02
CMC bet price 35.00-35.02
22nd
share price XYZ 34.40-34.42
CMC bet price 34.40-34.42
in the case of the actual share you would have the dividend to recompence for the loss in share value but, unless D4F made some adjustment you would have also made 58 x 50 =£2900 by the fact of the share price falling by the dividend amount.
So on the 22nd CMC will quote the new price but will adjust your account to take this into the calculation.
All the SB companies use this method in one form or another, it is one of the perenial problems (keeping on top of every single dividend) for SB companies and the main reason that they have the rider in their terms and conditions concerning whether they have the right to renage on prices that do not reflect the correct market value. (generally because a trader has missed a dividend)
Hope this helps
techcherry
Member
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- 0
hi all
I started not long time ago do some trading trought spreadbetting, at the moment, I am doing indices ...
is there anyone which can advise with any good system to follow/to select a good long/short...
thanks...
I started not long time ago do some trading trought spreadbetting, at the moment, I am doing indices ...
is there anyone which can advise with any good system to follow/to select a good long/short...
thanks...
neil
Legendary member
- Messages
- 5,169
- Likes
- 752
Look at the boards and read the "system" threads. Look at the "First Steps" thread.
Search under "stoploss" etc and experiment. Then put together your own "system" from bits culled from postings and questions.
You will not get any "system" that will work all the time. If their was such a creature then all would trade it and the market would cease.
Keep reading, using the "search" facility, question. It takes time and effort but one day you should evolve your own style.
management of self, your trade, and your money are key.
You will not get a style "system" given to you.
Good luck
Search under "stoploss" etc and experiment. Then put together your own "system" from bits culled from postings and questions.
You will not get any "system" that will work all the time. If their was such a creature then all would trade it and the market would cease.
Keep reading, using the "search" facility, question. It takes time and effort but one day you should evolve your own style.
management of self, your trade, and your money are key.
You will not get a style "system" given to you.
Good luck
