What fees and charges will a client incur?At Fortarde, we credit/debit our clients holding the Dividend paying share during the ex-date, in order to cover the paid Dividend.
1. All clients holding a Dividend paying share in a short position during the ex-Dividend day will be debited.
For example:
If you hold 1,000 shares in a short position in an opening price of $110 while the current market price is $100, and the paid Dividend is equal to $2 per share The share price will drop $2 on the ex-dividend day, meaning that you will earn more money on your short position due to the share price movement, so Fortrade will have to charge that exact amount. (No further fees or commission) This will show as commission.
P&L before the ex-dividend day: 1,000 * (110 – 100) = $10,000
No. of shares * (opening price – market price before the dividend payout)
P&L after the ex-dividend day: 1,000 * (110 – 98) = $12,000
No. of shares * (opening price – current market price)
(Assumes there were no other change in the share price)
Dividend charge: 1,000 * $2 = $2,000
No. of shares * dividend paid per share
Final P&L calculation: 1,000 (110 – 98) – 2,000 = $10,000
No. of shares * (opening price – current market price) – Dividend amount
2. All clients holding a dividend paying share in a long position during the ex-dividend day will be credited.
For example:
If you hold 1,000 shares in a long position at an opening price of $90 while the current market price is $100, and the paid dividend is equal to $2 per share. The share price will drop in $2 in the ex-dividend day, meaning that you will lose money on your long position due to the share price movement, so Fortrade will have to credit you with that exact amount. (No further fees or commission) This will show as commission.
P&L before the ex-dividend day: 1,000 * (100 – 90) = $10,000
No. of shares * (market price before the dividend payout – Opening Price)
P&L after the ex-dividend day: 1,000 * (98 – 90) = $8,000
No. of shares * (Current market price – Opening Price)
(Assumes there were no other change in the share price)
Dividend credit: 1,000 * $2 = $2,000
No. of shares * dividend paid per share
Final P&L calculation: 1,000 (98 – 90) + 2,000 = $10,000
No. of shares * (Current market price – Opening Price) + Dividend amount.
Please note: you do not own, or have any interest in, the underlying assets.