Today we’ll look at the top Three reasons for you to consider trading CFDs for dividends.
1. You will get paid your CFD dividend about the ex-dividend date.
You don’t have to wait for payment date
2. You are able to potentially enhance your stock market dividend play 3-5 times normal
3. Investors pave the right way to for any CFD dividend trading strategy
CFD Dividend basics
We should get the important basics off the beaten track before discussing the opposite strategies.
In the event you possess a CFD you happen to be eligible for the dividend just like should you owned the stock providing you own the stock ahead of the ex-dividend date. Those CFD traders who will be long the CFD will receive a credit on the level of the dividend on the ex-dividend date.
Those CFD traders that are short will have a debit towards the amount of the dividend and a few CFD brokers inside their PDS state they will often deduct the franking credits also (although this is not common in reality).
Franking Credits
CFD traders aren’t permitted any franking credits that you could be used to for trading stocks. Franking credits are in which the company has tax taken out so that you don’t have to pay tax on 100% fully franked dividends.
Let’s have a look at the Top 3 CFD trading strategies
1. You will get paid your CFD dividend on the ex-dividend date. It’s not necessary to wait for an payment date
Most CFD brokers pays you the full quantity of the dividend right then and there it is going ex-dividend. In the event you trade the ASX stocks you’d probably normally have to have to wait for that payment date which may be a few months later.
2. You’ll be able to potentially boost your currency markets dividend play 3-5 times standard
When the CFD you’re trading pays a 5% dividend and you’re simply trading at 3-5 times leverage then you can definitely potentially improve your dividend yield by 3-5 times that quantity. As opposed to receiving 5% now you can earn a dividend yield of 15-25%.
Although this sounds impressive you’ll want to take into account that every time a stock or CFD pays a dividend it’ll normally fall the quantity of the dividend. For example if Woolworths pays a 65
cent dividend then it will in theory fall 65 cents for the ex-dividend date supplying you with a capital loss in 65 cents. So that you make 65 cents around the dividend and lose 65 cents about the capital fall. This leaves you square and results in the next point…
3. Investors pave the best way to to get a CFD dividend trading strategy
Investors love dividends as it provides walk away income for next to no effort. Investors love fully franked dividends plus order to get that about the ASX stock exchange you have to own the stock at least 45 days before the ex-dividend date.
This can help with an uptrending stock due to people buying prior to the ex-div date. Your role within the CFD dividend trading technique is to obtain focused on confirmation of uptrend of these stocks paying a dividend and selling just prior to the stock going ex-dividend. What this means is you’ll take advantage of the capital gain ahead of the ex-div date.
Having a CFD dividend trading approach is the best way to improve your yearly stock trading game returns.
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