When a publicly-traded company issues a corporate action, it is initiating a process that directly affects the securities issued by that company. Corporate actions can range from pressing financial matters, such as bankruptcy or liquidation, to a firm changing its name or trading symbol. Dividends, stock splits, mergers, acquisitions and spinoffs are all common examples of corporate actions.
Dividends are applied the day before the ex-dividend date shown in the table below *:
|Ticker||Company name||Ex-dividend date||Dividend amount||Dividend currency|
|Bank of America||2021/03/04||0.018||USD|
|British American Tobacco||2021/03/25||0.0539||GBP|
A stock split is a corporate action that increases the number of a company’s available shares. This is done by dividing each share into multiple ones and reducing the share price accordingly. A stock split does not impact the company’s market capitalisation**.
|Ticker||Company name||Split date||Split ratio|
* The payment of dividends on a stock can affect the costs of your Share CFD position. For example, when a company pays out dividends on a stock, its value will reduce. So, if you have a Sell position on the stock, that’s good for you; but if you have a Buy position, the opposite is true.
To mitigate the sudden price movements of a dividend payout, dividend adjustments are applied to our Share CFD. Buy positions are credited a dividend adjustment, whereas Sell positions are debited the adjustment.
An ex-dividend date of 3rd March would mean that all positions held at the end of 2nd March would be subject to a dividend adjustment. If you want to avoid the payment of dividends, we recommend that you close your position before the adjustment is applied.
The dividends on Buy positions may be smaller than those on Sell positions.
The sum of the dividends may be reduced by our interest rate and/or our liquidity provider’s interest rate.
- ** Split. Clients with open positions will have their positions automatically closed.
All pending entry orders and stop/limit orders that are associated with these instruments will be cancelled. Clients will need to re-establish new entry orders if desired or to reinsert stop and limit orders.