Watch out!

[trader_dante]

I'm holding a Dax position at the moment.

I have just looked at my account transactions and it says (£0.68) - debit for rolling trade.

Fine. That's the amount debited for holding it overnight.

Than above this (£73.96)- Debit for dividend trade.

I've presumed this is not a mistake.

I have managed to get through the last six years without ever coming across this charge (either incurring it or hearing about it) and hence had no idea it existed!

WTF is this about? Does anyone know?

Is there any way to find out when this will occur?

 

[Black Swan]

I'm holding a Dax position at the moment.

I have just looked at my account transactions and it says (£0.68) - debit for rolling trade.

Fine. That's the amount debited for holding it overnight.

Than above this (£73.96)- Debit for dividend trade.

I've presumed this is not a mistake.

I have managed to get through the last six years without ever coming across this charge (either incurring it or hearing about it) and hence had no idea it existed!

WTF is this about? Does anyone know?

Is there any way to find out when this will occur?

Is it the charge for the minimum stop for the trade, or the automatic stop you place for this type of trade?

 

[montmorencyt2w]

I hardly ever trade indices, but a while back (a few months) I had a short position on the FTSE and had the usual (modest) overnight rolling charges, but once (I think) also had something (much less modest) relating to dividend. Didn't understand it, but assumed it must be normal. This was with Tradefair. Can't remember how long I was holding it. Could have been a couple of weeks or so.

 

[JER08]

"Debit for dividend trade."

This has happened before on some of my FTSE100 and SP shorts.

I think what happened was whenever some of the stocks go ex-dividend causing the index to drop a few points, you are supposed to pay for this dividend if you're short the relevant index.
Normally it'll only be a few points damage.

Hope this helps to explain it.

 

[trader_dante]

Is it the charge for the minimum stop for the trade, or the automatic stop you place for this type of trade?

No, I called them.

It relates to divident payments as explained by JER08. They previously had it in place for the FTSE and now it has been extended to the Dax.

They just bought in it yesterday (great timing) with no apparent warning that I could see.

It was a bit more than a few points. Infact it was just under 20 X my stake.

So be aware if you are holding a position in the Dax or the FTSE on a dividend announcement.

 

[N Rothschild]

that DAX long must be HUGE

 

[bedsit]

I'm holding a Dax position at the moment.

I have just looked at my account transactions and it says (£0.68) - debit for rolling trade.

Fine. That's the amount debited for holding it overnight.

Than above this (£73.96)- Debit for dividend trade.

I've presumed this is not a mistake.

I have managed to get through the last six years without ever coming across this charge (either incurring it or hearing about it) and hence had no idea it existed!

WTF is this about? Does anyone know?

Is there any way to find out when this will occur?

I used to trade FTSE100 (more than a year ago). If I left short open from Tuesday till Wednesday they would charge me so called dividend charge.

 

[arabianights]

But doesn't the dax index reflect cumulative dividends, making this nonsensical by the spreadbetting company?

 

[pssonice]

the dax index reflects cumulative dividends!

the dow doesnt

 

[pboyles]

No, I called them.

It relates to divident payments as explained by JER08. They previously had it in place for the FTSE and now it has been extended to the Dax.

They just bought in it yesterday (great timing) with no apparent warning that I could see.

It was a bit more than a few points. Infact it was just under 20 X my stake.

So be aware if you are holding a position in the Dax or the FTSE on a dividend announcement.

The sad thing is that there will be plenty of people defending spreadbetting and saying that this type of thing is normal in trading and is in the T&C. Its just another way to take your money off you.

SB is the next best thing to theft, amazing how many people get blinded by the tax free nonsense. Well you just paid your tax on this trade, 20x your stake.

 

[MrGecko]

The DAX is a Total Return Index - cumulative dividends are included...

were you long or short?

What was the underlying - the Future, the Index, an ETF..??

 

[trader_dante]

The DAX is a Total Return Index - cumulative dividends are included...

were you long or short?

What was the underlying - the Future, the Index, an ETF..??

I was short the Dax in the rolling cash.

 

[jaswells]

In the past i've paid in excess of 200 quid for this little adjustment but somehow I've always found it justified. Is it not true that the index after all is going to open slightly lower due to ex-dividends and therefore the short your holding is benefiting from that adjustment by the amount they debit. Interestingly though, does a long position benefit to the same degree? If not I guess this has rip off written all over it.

I always check with Reuters so that i'm fully prepared for the hit:

EG for this week:

http://www.reuters.com/article/idUSLDE63F1F420100419

 

[tar]

I'm holding a Dax position at the moment.

I have just looked at my account transactions and it says (£0.68) - debit for rolling trade.

Fine. That's the amount debited for holding it overnight.

Than above this (£73.96)- Debit for dividend trade.

I've presumed this is not a mistake.

I have managed to get through the last six years without ever coming across this charge (either incurring it or hearing about it) and hence had no idea it existed!

WTF is this about? Does anyone know?

Is there any way to find out when this will occur?

Dividend on Ftse100 occurs on Wednesdays only , so if u hold a position from Tuesday night on the Ftse expect some dividend , in the other hand Dow dividend can be on any day , it is usually few points only ...

 

[N Rothschild]

so spreadbetters are now charging you to hold a posisiton ontop of flogging on you the spread every roll over at night.

lol.

some people need to wake the f up!

 

[tar]

so spreadbetters are now charging you to hold a posisiton ontop of flogging on you the spread every roll over at night.

lol.

some people need to wake the f up!

charge u OR pay u sometimes

 

[pboyles]

charge u OR pay u sometimes

Has anyone said they have recieved a credit for this type of thing?

 

[montmorencyt2w]

charge u OR pay u sometimes

Indeed, at least for FX, so I don't agree with the proposition that SB is theft, although I did resent it a bit when Tradefair doubled their overnight FX charges with little or no warning. The credits were not doubled, needless to say. Still, I've made a reasonable amount out of rolling credits when the trades & interest rates have been in the appropriate direction, so can't complain too much. I'm a bit more careful now about what I leave running overnight, especially at weekends, although I feel in a way this is the tail wagging the dog, which worries me slightly. (I know there are those who say you should never leave anything running overnight with a SB firm, but that's for another thread I think).

 

[pboyles]

Indeed, at least for FX, so I don't agree with the proposition that SB is theft, although I did resent it a bit when Tradefair doubled their overnight FX charges with little or no warning. The credits were not doubled, needless to say. Still, I've made a reasonable amount out of rolling credits when the trades & interest rates have been in the appropriate direction, so can't complain too much. I'm a bit more careful now about what I leave running overnight, especially at weekends, although I feel in a way this is the tail wagging the dog, which worries me slightly. (I know there are those who say you should never leave anything running overnight with a SB firm, but that's for another thread I think).

No not the overnight financing charge I was referring to the index dividend charge that cost somebody £70

 

[tar]

No not the overnight financing charge I was referring to the index dividend charge that cost somebody £70

if u r long they pay u the dividend ( capitalspreads will pay 80% and charge 100% if short ) , regarding the 20X stake dividend charged on the Dax this the first time i know this , maybe it is a mistake maybe it is 7 pounds not 70 makes more sense , usually few points only and on the Ftse the dividend is on Tuesday night only ...