Today we’ll discuss the superior Three good reasons why you should consider trading CFDs for dividends.
1. You will get paid your CFD dividend for the ex-dividend date.
It’s not necessary to wait for a payment date
2. It is possible to potentially improve your currency markets dividend play 3-5 times the norm
3. Investors pave the right way to for a CFD dividend trading strategy
CFD Dividend basics
Let us get the key basics dealt with before discussing the other strategies.
In the event you own a CFD you’re entitled to the dividend just like in case you owned the stock providing you own the stock prior to the ex-dividend date. Those CFD traders who will be long the CFD will get a credit towards the amount of the dividend around the ex-dividend date.
Those CFD traders who are short will receive debit towards the amount of the dividend and a few CFD brokers within their PDS state they will often deduct the franking credits too (although not common used).
Franking Credits
CFD traders are certainly not eligible to any franking credits that you might be familiar with for trading stocks. Franking credits are in which the company has tax obtained so that you don’t need to pay tax on 100% fully franked dividends.
Let’s take a look at the superior 3 CFD trading strategies
1. You get paid your CFD dividend around the ex-dividend date. It’s not necessary to wait for the payment date
Most CFD brokers pays you the full volume of the dividend on the day it is ex-dividend. Should you trade the ASX stocks you’d probably normally have to have to wait for the payment date that may be weeks later.
2. It is possible to potentially boost your stock market dividend play 3-5 times standard
In the event the CFD you’re trading pays a 5% dividend and you’re trading at 3-5 times leverage then you can potentially enhance your dividend yield by 3-5 times that quantity. Instead of receiving 5% you can now earn a dividend yield of 15-25%.
Although this sounds impressive you’ll want to keep in mind that every time a stock or CFD pays a dividend it will normally fall the volume of the dividend. As an example if Woolworths pays a 65
cent dividend this will theoretically fall 65 cents around the ex-dividend date giving you a capital decrease of 65 cents. So that you make 65 cents for the dividend and lose 65 cents on the capital fall. This leaves you square and leads to the next point…
3. Investors pave the right way to for a CFD dividend trading strategy
Investors love dividends mainly because it provides re-occurring income for hardly any effort. Investors love fully franked dividends plus to wardrobe about the ASX stock exchange you need to own the stock no less than 45 days before the ex-dividend date.
This can give rise to an uptrending stock as result of people buying ahead of the ex-div date. Your role within the CFD dividend trading technique is to have focused on confirmation of uptrend of these stocks paying a dividend and then sell just prior to the stock going ex-dividend. Therefore you’ll benefit from the capital gain ahead of the ex-div date.
Using a CFD dividend trading technique is the best way to increase your yearly stock trading game returns.
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