Dividends and Fair Value
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.

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 = £50 (debited)

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.