Today we’ll investigate the very best 3 reasons why you should consider trading CFDs for dividends.
1. You get paid your CFD dividend for the ex-dividend date.
You don’t have to wait for an payment date
2. You can potentially enhance your currency markets dividend play 3-5 times the norm
3. Investors pave the best way to for a CFD dividend trading strategy
CFD Dividend basics
Let’s get giving her a very basics off the beaten track before discussing another strategies.
If you own a CFD you might be entitled to the dividend just like if you owned the stock providing you own the stock ahead of the ex-dividend date. Those CFD traders that are long the CFD will receive a credit for the amount of the dividend about the ex-dividend date.
Those CFD traders who will be short will receive debit towards the quantity of the dividend and a few CFD brokers of their PDS state they will often deduct the franking credits too (although not common utilized).
Franking Credits
CFD traders aren’t permitted any franking credits that you might be utilized to for stock trading. Franking credits are the location where the company has tax obtained so that you don’t need to pay tax on 100% fully franked dividends.
Let’s look into the Top 3 CFD trading strategies
1. You get paid your CFD dividend around the ex-dividend date. You don’t have to wait for a payment date
Most CFD brokers will probably pay the full level of the dividend right then and there it is going ex-dividend. In the event you trade the ASX stocks you’ll usually have to hold back for the payment date which is often several weeks later.
2. You are able to potentially improve your stock trading game dividend play 3-5 times the norm
If your CFD you are trading pays a 5% dividend and you are trading at 3-5 times leverage then you can definitely potentially supercharge your dividend yield by 3-5 times that quantity. As opposed to receiving 5% now you can earn a dividend yield of 15-25%.
Of course this sounds impressive you have to understand that when a stock or CFD pays a dividend it will normally fall the amount of the dividend. For example if Woolworths pays a 65
cent dividend that will the theory is that fall 65 cents on the ex-dividend date providing you a capital decrease of 65 cents. Which means you make 65 cents about the dividend and lose 65 cents around the capital fall. This leaves you square and results in another point…
3. Investors pave the best way to to get a CFD dividend trading strategy
Investors love dividends since it provides re-occurring income for next to no effort. Investors love fully franked dividends as well as in order to wardrobe on the ASX stock exchange you have to own the stock at the very least 45 days prior to ex-dividend date.
This can give rise to an uptrending stock as result of people buying before the ex-div date. Your role in the CFD dividend trading technique is to obtain focused on confirmation of uptrend of these stocks paying a dividend and then sell on just before the stock going ex-dividend. This means you’ll take advantage of the capital gain before the ex-div date.
Employing a CFD dividend trading strategy is a powerful way to increase your yearly stock trading game returns.
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