Here is this week’s Upcoming estimated Dividends commencing
How are dividends dealt with for indices?
Dividends are cash issued payments based on a company’s earnings, for indices a dividend would be produced if a company within the index issued a dividend. The volume and timing are decided by the board of directors. Dividends can also be issued as shares if the underlying share is owned.
Depending if you were long or short it will impact your position different. The change in price for a long position would be disadvantageous due to the fall in price therefore an account credit would be applied. However, the inverse position would mean an account debit to cater for the benefit of the price drop. Therefore, you wouldn’t lose or gain from the dividend.
Let's say you hold a long position of 4,000 Lots of UK100ROLL and there is a dividend of 12p. This would mean £480 would be credited to your account.
12p x 4,000 = £480
Note: If you held a short position going into the ex-dividend date then your account would be debited £480.
Any adjustments made to a long position due to a dividend will be less applicable withholding taxes – a tax deducted from dividends in the underlying market. This levy is based on the underlying; usually around 15%.
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