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Exchange
Traded CFD Dividend
Adjustments
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Exchange traded Cfds are subject to dividend adjustments. The mechanics
of the dividend payment differ from that used for the underlying
physical. With the physical shares, dividends are payable on a date
weeks out from the stipulated ex-dividend date. With exchange traded
cfds, the settlement for the dividend occurs on the ex-date. Long
positions receive the dividend and short positions pay the dividend in
the same manner as over the counter contracts for difference.
Positions are calculated at the close of trading on the last day cum
dividend. Dividend payment occurs the following day (the first ex
dividend day).
ASX Index positions will also be subject to dividend adjustments
thereby generating a cash flow when the security that forms part of
that index goes ex dividend. Long positions receive the dividend whilst
short positions pay the dividend.
Exchange
Traded CFD Franking Credits &
Adjustments
The treatment of franking credits only applies to asx cfd equities
and is stipulated as franking credit cashflow constituting the monetary
equivalent of the declared franking credit. The ASX have termed this
FCC. Long position holders receive FCC whilst short position holders
pay FCC. The amount payable or receivable differs depending on the
percentage of net short open positions (NSOP) held by designated price
makers at the close of trading on the last cum date.
The mechanics of NSOP is based on the exchange calculation by
determining net open positions of DPMs and expressing it as a
percentage of the total open short position. If the net DPM position is
long you receive full FCC otherwise a short net FCC position will
result in an FCC payment discounted by the NSOP percentage.
What
you need to know to successfuly traded ETF's
Cashflow
Yield For ASX FX CFDs
The ASX FX Cfds parallel the relationship of the two currencies that
constitute the contract. The contract comprises two base currencies
which results in margin, contract interest and the open interest charge
being calculated on the basis of the contracts base currency and the
cashflow denominated in the contracts other currency.
In the example of the AUD/USD cross, the base currency for the
calculation of margin, the exchange open interest charge and brokerage
is the US dollar. The yield cashflow is denominated in the AUD.
Contract holders of long positions receive the yield cashflow whilst
holders of short positions pay the yield cashflow. The yields cashflow
is paid and received the following trading day based on position
calculation at the previous days close. The interest rate calculation
for the yield cashflow is based on the appropriate benchmark overnight
cash rate of that currency.
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