FPG Dividends
What are Dividends?
A dividend is a distribution of a portion of a company’s earnings to its shareholders. Typically, dividends are issued as cash payments to those who own the underlying shares. However, they can also be paid out in the form of additional shares. This distribution allows investors to benefit directly from the company’s profits, either through immediate cash or by increasing their shareholding.
How Does a Dividend Affect the Price of Share CFD?
When a company pays out a dividend, the price of its shares typically drops by the amount of the dividend on the ex-dividend date. This decline reflects the fact that the company is distributing a portion of its earnings to shareholders. Consequently, any index that includes the underlying company will also experience a decrease. The index’s value will fall by the equivalent weighted average value of the dividend paid out by the company. This adjustment ensures that the index accurately reflects the current market value of its constituent shares after the dividend distribution.
How to calculate Dividends?
Dividends can be calculated using the following steps:
Identify the Dividend Per Share (DPS)
This information is usually provided by the company. It represents the amount of money paid out per share.
Determine the Number of Shares Owned
This is the total number of shares you hold in the company.
Multiply DPS by the Number of Shares
To find the total dividend, multiply the dividend per share by the number of shares you own.
Formula:
Total Dividend : Dividend Per Share (DPS)×Number of Shares Owned
For example, if a company declares a dividend of $2 per share and you own 100 shares, your total dividend would be:
2(DPS) × 100(Shares) = $200
This calculation provides the total dividend you will receive.
How Will My Position Be Affected by the Dividend?
When a company pays a dividend, the price of its shares typically drops by the dividend amount on the ex-dividend date. This decrease affects any index containing the company, reducing its value by the weighted average of the dividend. Consequently, your position in the share or index CFD will adjust to reflect this change.
FPG manages dividend adjustments using the swaps mechanism.
Example:
Let’s consider the following scenario:
- There is an upcoming dividend adjustment of 1.5 USD for the US Tech Index, leading to an expected price drop on the ex-dividend date.
- The closing rate of the Index before the ex-dividend date is 12500.00.
- Assuming no other market forces, the Index is projected to open at 12498.5 on the ex-dividend date.
The daily swaps values for the Index during the current week are as follows:
- MT4/MT5 Swap Long: -2.46
- MT4/MT5 Swap Short: +0.72
- FPG proprietary platform/App Swap Long: -0.0197%
- FPG proprietary platform/App Swap Short: +0.0058%
On the day before the ex-dividend date, the swaps for the Index will be adjusted as follows:
- MT4/MT5 Swap Long: -2.46 + 1.50 = -0.96
- MT4/MT5 Swap Short: +0.72 – 1.50 = -0.78
- FPG proprietary platform/App Swap Long: -0.0197% + (0.012%) = -0.0077%
- FPG proprietary platform/App Swap Short: +0.0058% – (0.012%) = -0.0062%
What Does Ex-Dividend Mean?
The ex-dividend date refers to the day when a stock no longer includes the right to receive the upcoming dividend payment. It typically occurs one business day before the dividend is paid out by the company.
Key Points:
- Traders who open a position on the ex-dividend date will not receive the dividend payment nor are they obligated to pay it.
- The stock’s price typically decreases on this date due to the dividend payout.
The Upcoming Dividend Adjustments
| Instrument | Symbol | Expired Dividend Date | Dividend | Currency |
|---|---|---|---|---|
|
Australia 200 Index |
AUS200 |
9/09/2024 |
4.405 |
AUD |
|
Australia 200 Index |
AUS200 |
10/09/2024 |
0.856 |
AUD |
|
Australia 200 Index |
AUS200 |
11/09/2024 |
2.577 |
AUD |
|
Australia 200 Index |
AUS200 |
12/09/2024 |
27.782 |
AUD |
|
Australia 200 Index |
AUS200 |
13/09/2024 |
1.724 |
AUD |
|
Australia 200 Index |
AUS200 |
16/09/2024 |
0.899 |
AUD |
|
China A50 Index |
A50 |
9/09/2024 |
4.078 |
USD |
|
China A50 Index |
A50 |
13/09/2024 |
5.249 |
USD |
|
Hong Kong 50 Index |
HK50 |
9/09/2024 |
7.752 |
HKD |
|
Hong Kong 50 Index |
HK50 |
10/09/2024 |
1.956 |
HKD |
|
Hong Kong 50 Index |
HK50 |
11/09/2024 |
9.964 |
HKD |
|
Hong Kong 50 Index |
HK50 |
12/09/2024 |
22.733 |
HKD |
|
Hong Kong 50 Index |
HK50 |
13/09/2024 |
4.199 |
HKD |
|
Hong Kong 50 Index |
HK50 |
16/09/2024 |
1.852 |
HKD |
|
Spain 35 Index |
ES35 |
9/09/2024 |
1.172 |
EUR |
|
UK 100 Index |
UK100 |
9/09/2024 |
0.722 |
GBP |
|
UK 100 Index |
UK100 |
12/09/2024 |
1.182 |
GBP |
|
US 500 Index |
US500 |
9/09/2024 |
0.575 |
USD |
|
US 500 Index |
US500 |
10/09/2024 |
0.153 |
USD |
|
US 500 Index |
US500 |
11/09/2024 |
0.055 |
USD |
|
US 500 Index |
US500 |
12/09/2024 |
0.132 |
USD |
|
US 500 Index |
US500 |
13/09/2024 |
0.938 |
USD |
|
US 500 Index |
US500 |
16/09/2024 |
1.012 |
USD |
|
US Tech 100 Index |
USTEC |
9/09/2024 |
1.174 |
USD |
|
US Tech 100 Index |
USTEC |
10/09/2024 |
0.163 |
USD |
|
US Tech 100 Index |
USTEC |
12/09/2024 |
0.468 |
USD |
|
US Tech 100 Index |
USTEC |
13/09/2024 |
2.497 |
USD |
|
US Wall Street 30 Index |
US30 |
10/09/2024 |
6.898 |
USD |
|
US Wall Street 30 Index |
US30 |
12/09/2024 |
2.628 |
USD |
|
US Wall Street 30 Index |
US30 |
13/09/2024 |
3.186 |
USD |
|
US Wall Street 30 Index |
US30 |
16/09/2024 |
18.855 |
USD |
| Instrument | EOD Position | EX Dividend Date | Long Dividend | Short Dividend | Currency |
|---|---|---|---|---|---|
|
US30 |
8/16/2024 |
8/19/2024 |
10.708444 |
-10.708444 |
USD |
|
US500 |
8/16/2024 |
8/19/2024 |
0.603603 |
-0.603603 |
USD |
|
AUS200 |
8/16/2024 |
8/19/2024 |
0.2748 |
-0.2748 |
AUD |
|
USTEC |
8/19/2024 |
8/20/2024 |
0.196815 |
-0.196815 |
USD |
|
US500 |
8/19/2024 |
8/20/2024 |
0.162344 |
-0.162344 |
USD |
|
AUS200 |
8/19/2024 |
8/20/2024 |
1.036727 |
-1.036727 |
AUD |
|
US500 |
8/20/2024 |
8/21/2024 |
0.248964 |
-0.248964 |
USD |
|
AUS200 |
8/20/2024 |
8/21/2024 |
23.584421 |
-23.584421 |
AUD |
|
USTEC |
8/21/2024 |
8/22/2024 |
0.758626 |
-0.758626 |
USD |
|
US500 |
8/21/2024 |
8/22/2024 |
0.102209 |
-0.102209 |
USD |
|
UK100 |
8/21/2024 |
8/22/2024 |
3.163363 |
-3.163363 |
GBP |
|
AUS200 |
8/21/2024 |
8/22/2024 |
0.59085 |
-0.59085 |
AUD |
|
US500 |
8/22/2024 |
8/23/2024 |
0.080146 |
-0.080146 |
USD |
|
HK50 |
8/22/2024 |
8/23/2024 |
1.722128 |
-1.722128 |
HKD |
|
A50 |
8/22/2024 |
8/23/2024 |
6.590723 |
-6.590723 |
USD |
|
AUS200 |
8/22/2024 |
8/23/2024 |
0.501506 |
-0.501506 |
AUD |
*The final adjustment may differ from the forecast amount previously displayed.
