How do I trade CFD Shares with Ai Ï?
When
trading a single CFD share there will be corporate actions enforced
by the related company. An example of this is a cash dividend. If
this has been issued then Ai Ï will adjust the client’s account
accordingly. Ai Ï will take two actions:
Clients who hold BUY
position(s) in a single share CFD on the ex-dividend date, will
receive a positive cash amount which is equivalent to the dividend
payout. (Deposits will be made into the client’s trading account
according to their lot size and proportion of the dividend paying
underlying securities).
Clients who hold SELL position(s) in a
single share CFD on the ex-dividend date, will receive a cash amount
which is equivalent to the dividend payout. (Withdrawal will be made
from the client’s trading account according to their lot size and
proportion of the dividend paying underlying securities.)
Adjustment
Formula:
Number of shares * Dividend per share =
Adjustment amount
(If client account is denominated in USD, the
adjustment amount will be converted to USD according to the spot
exchange rate)
Cash Dividend
For example, if Apple Inc. (AAPL) announces
a $0.01 USD cash dividend to its shareholders. On the
ex-dividend date, Apple Inc.’s share price would reflect
the corporate action and would drop $0.01 in price. Ai Ï
will make cash adjustments to clients who are holding
open positions of the Apple Inc. CFD.
If an
individual client of Ai Ï is holding 10,000 shares of
BUY positions, the cash adjustment will be calculated
using the following equation:
10,000 share CFDs x
0.01USD = 100USD cash dividend
(Note: If a client is
holding 10,000 shares of SELL positions, Ai Ï will
deduct 100USD from the client’s account.)
Share Split or Reserve Share Split
If a company announces a share split or
reserve share split, the company’s share price will be
subject to significant change.
Reserve Share
Split: CFD price will increase
Share Split: CFD price
will decrease
Open positions of the Apple Inc
CFD. Should this not just say ‘clients who are holding
open positions of the relevant CFD?’
However, a
single share CFD will also be affected by corporate
action, which may occur when the listed company
initiates any business changes Like a share split,
reserve share split, or a dividend payout, etc., and as
a result may affect the company’s financial position,
its share price performance, and the interests of
shareholders.
Dividends
A listed company will announce its earnings reports semi-annually (or quarterly). Dividends are subject to approval by a company’s board of directors, and It’s a distribution of a company’s earnings to a specified class of its shareholders. Generally, dividends will be issued in the form of cash dividends or share dividends.
Ex-dividend Date
An ex-dividend is a share trading term that specifies when a declared dividend is owned by the buyer, as opposed to the seller. If an individual buys a share before the ex-dividend day, he or she is then entitled to receive a dividend. If an individual buys a share on or after the ex-dividend date, the buyer no longer had the right to receive the dividend.
