Understanding Dividends
Dividends represent a portion of a company’s earnings that are distributed to its shareholders. Typically, they are issued as cash payments to those holding shares, though some companies may offer additional shares instead.
- If you hold a long position, you receive the dividend.
- If you hold a short position, you will be charged the dividend.
At Ox Securities, Dividend payments are processed between 00:00 – 00:55 platform server time.
Upcoming Index Dividends
| Index | Monday 24/03 | Tuesday 25/03 | Wednesday 26/03 | Thursday 27/03 | Friday 28/03 | CCY |
|---|---|---|---|---|---|---|
| AUS200 | 0.44 | 0.71 | 0.07 | 0.53 | 1.03 | AUD |
| CN50 | USD | |||||
| DE30 | EUR | |||||
| FR40 | 0.23 | 7.96 | EUR | |||
| HK50 | HKD | |||||
| JP225 | 307.1 | JPY | ||||
| STOXX50 | 0.76 | 2.56 | EUR | |||
| UK100 | 12.51 | GBP | ||||
| US30 | USD | |||||
| US500 | 0.05 | 0.23 | 0.02 | 0.18 | USD | |
| USTEC100 | 0.42 | USD |
*Expected dividend adjustments stated in full index points per contract. Figures stated are forecast amounts sourced via Bloomberg. The final adjustment may differ from the forecast amount previously displayed.
Key Features of Dividends:
- Shareholder Incentive – Dividends serve as a form of compensation and are typically paid quarterly or semi-annually.
- Investment Appeal – Many investors are attracted to companies that offer dividends as a return on investment.
- Financial Indicator – A company with strong cash flow and profitability is more likely to return capital to shareholders.
- Growth vs. Dividends – High-growth companies often reinvest profits rather than pay dividends, aiming to generate higher returns through capital appreciation.
What is the Ex-Dividend Date?
The ex-dividend date marks the point at which a stock no longer carries the right to receive an upcoming dividend.
- It usually occurs one business day before the dividend payment date.
- Traders who open a position on or after the ex-dividend date will not be eligible to receive or pay the dividend.
- Stock prices typically drop by the dividend amount on this date.
How Do Dividends Impact Traders?
When a company issues a dividend, its share price typically drops by the dividend amount, as the company distributes cash from its balance sheet to shareholders. This reduction in cash is factored into the company’s valuation.
For stock indices, dividend payouts from constituent companies can influence the index value. Each company’s impact on the index is usually determined by market capitalization, meaning larger companies have a greater effect. The more heavily weighted companies that pay dividends, the larger the adjustment to the index.
- Since dividend payments are scheduled events, traders cannot profit or lose solely from the resulting price movement.
- If you have an open position during a dividend adjustment, we ensure no financial impact on your trading account.
- This is done by crediting or debiting your account with the same amount incurred from the dividend adjustment.
You can find these adjustments recorded in your trade account history.
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