Dividends: what % do you get?

This is a discussion on Dividends: what % do you get? within the Spread Betting & CFDs forums, part of the Commercial category; Hi, A few companies have paid large special dividends recently (Heritage Oil: special dividend:100p/share price:450p; Polo resources:3p/7p etc,...). More to ...

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Old Aug 23, 2010, 1:18am   #1
Joined Aug 2008
Dividends: what % do you get?

Hi,

A few companies have paid large special dividends recently (Heritage Oil: special dividend:100p/share price:450p; Polo resources:3p/7p etc,...). More to come include International Power, Dignity,...

Which spread-betting firm do you use and what % proportion of dividend do you get if you are long? Thanks.

IG Index: 85%
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Old Aug 23, 2010, 10:25pm   #2
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Re: Dividends: what % do you get?

alphahunter started this thread Well guys, I know - dividends is not the most exciting topic compared to FX trading leveraged 20x. But I don't do FX, only long-short small to large cap stocks.

And a few cos are returning large amount cash to shareholders by way of special dividends; not all spreadbetting companies will credit the full amount of the dividend if you are long, although they would charge you the full amount if you are short. Obvioulsy that does not apply to CFDs and direct holdings (you get the full amount but then you pay income tax on it).

That does not matter that much for regular (read small) dividends. But in the case of Heritage Oil for instance, I knew that IG Index would retain 15p out of the 100p special dividend for each 450p-worth share, equivalent to 3% instant loss of value even before trading cost/spread. That's why I did not go for it (independently of the investment case proper).

Yet it can be a viable short-term strategy to go for special dividends (not the purpose of that thread) provided they are credited in full. Hence my question.

Someone mentionned to me that Interactive Broker credits 100% of the dividend for long spreadbetters; IG Index does 85%. How much do you get with your spreadbetting company?

Thanks.
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Old Aug 31, 2010, 7:50pm   #3
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Re: Dividends: what % do you get?

alphahunter started this thread OK, not much of an answer after more than 130 viewings in a week. I'll post the query in the UK equity forum and deem this thread closed. Thanks.
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Old Aug 31, 2010, 7:57pm   #4
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Re: Dividends: what % do you get?

Quote:
Originally Posted by alphahunter View Post
Hi,

A few companies have paid large special dividends recently (Heritage Oil: special dividend:100p/share price:450p; Polo resources:3p/7p etc,...). More to come include International Power, Dignity,...

Which spread-betting firm do you use and what % proportion of dividend do you get if you are long? Thanks.

IG Index: 85%
You get the same dividend whether you are SBing, CFDing - it's based on the # shares holding even if leveraged.
Where did you get the info from? Large dividend payouts like this mean stop losses need to be adjusted.
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Old Aug 31, 2010, 8:15pm   #5
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Re: Dividends: what % do you get?

alphahunter started this thread "You get the same dividend whether you are..."

No you don't I'm afraid. IG Index may be credited with the (full) dividend (if they hedged their position) but they don't pass it on fully. This is a commercial decision, vaguely "justified" in an interview by one of their reps that should you hold the stock directly, you would be subjected to the witholding tax. Which is mixing apples and oranges.
I'm a client of IG Index, that's my source and am fairly satisfied with them.

PS: I don't and haven't used stop losses for 3 years bar two occasions. It's a waste of money IMO.




"Where did you get the info from?"
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Old Aug 31, 2010, 8:25pm   #6
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Re: Dividends: what % do you get?

Quote:
Originally Posted by alphahunter View Post
"You get the same dividend whether you are..."

No you don't I'm afraid. IG Index may be credited with the (full) dividend (if they hedged their position) but they don't pass it on fully. This is a commercial decision, vaguely "justified" in an interview by one of their reps that should you hold the stock directly, you would be subjected to the witholding tax. Which is mixing apples and oranges.
I'm a client of IG Index, that's my source and am fairly satisfied with them.

PS: I don't and haven't used stop losses for 3 years bar two occasions. It's a waste of money IMO.




"Where did you get the info from?"
That's a rather broad statement about stop losses.
What do you mean they don't pass it on fully? If there's a dividend, they pay it out to your account regardless of their holding in the market. Perhaps it's in the small print that they don't HAVE to but fact is that they do.
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Old Aug 31, 2010, 8:41pm   #7
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Re: Dividends: what % do you get?

alphahunter started this thread Hi San Miguel.


1) You're right it's a broad statement that needs to be adjusted for personal aversion for risk and take into account specific circumstances (e.g. stock subject to formal take-over talks that may not materialise,...). But let's leave that issue aside as it is an entirely different subject.

2) If there is a dividend, of course they will credit it to MY account regardless of their holdings and that dividend will be credited to THEIR account if they hedged their position. We agree here.

3) BUT they will not credit it to my account to its full amount. They take a cut. It's a commercial decision.
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Old Aug 31, 2010, 8:45pm   #8
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Re: Dividends: what % do you get?

Quote:
Originally Posted by alphahunter View Post
Hi San Miguel.


1) You're right it's a broad statement that needs to be adjusted for personal aversion for risk and take into account specific circumstances (e.g. stock subject to formal take-over talks that may not materialise,...). But let's leave that issue aside as it is an entirely different subject.

2) If there is a dividend, of course they will credit it to MY account regardless of their holdings and that dividend will be credited to THEIR account if they hedged their position. We agree here.

3) BUT they will not credit it to my account to its full amount. They take a cut. It's a commercial decision.
I contacted their CS and they said you get the full amount. I believe they adjust it at source for the "tax" rate that is applied to all dividends. What cut are they taking from your dividends?
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