Alpari stock and indices dividend adjustments
| Tue 2/9 | Wed 3/9 | Thu 4/9 | Fri 5/9 | Mon 8/9 | |
|---|---|---|---|---|---|
| ANALOG DEVICES INC | 0.9900 | - | - | - | - |
| ASSURANT INC | 0.8000 | - | - | - | - |
| BORGWARNER INC | 0.1700 | - | - | - | - |
| CHINA RESOURCES BEER HOLDING | 0.0652 | - | - | - | - |
| CLEARWAY ENERGY INC-A | 0.4456 | - | - | - | - |
| CLP HOLDINGS LTD | 0.0808 | - | - | - | - |
| CORTEVA INC | 0.1800 | - | - | - | - |
| EQUIFAX INC | 0.5000 | - | - | - | - |
| ESTEE LAUDER COMPANIES-CL A | 0.3500 | - | - | - | - |
| HARTFORD INSURANCE GROUP INC | 0.5200 | - | - | - | - |
Dividend adjustments explained
Not sure how dividend adjustments work? Watch our handy explainer.
What is a dividend adjustment?
A dividend adjustment is a change made to a company’s stock price to balance a dividend payment to shareholders.
Once the dividend allocation for shareholders has been confirmed, the stock price of the company decreases by roughly the amount of the dividend. This is known as the ex-dividend date.
What impact does a dividend adjustment have on traders?
The dividend adjustment will cause the stock price to decrease by roughly the dividend payment amount.
To make sure that the decrease in the stock or index price doesn’t have any material impact on open positions, Alpari will adjust the trader’s account to match the new ex-dividend price.
This will either be a credit or a debit, depending on whether the trader has a long (buy) or short (sell) position open.
Dividend adjustment examples
Long position:
Let's say that a trader is 20 lots long in NAS100 at a price of $18,000.00. A dividend adjustment decreases the total value of the index by $3.55.
Normally, this would result in a net loss for the trader. However, as this decrease in value is not a true loss for the trader, we credit the trader's balance to account for the dividend adjustment and 'make them whole'.
The credit would be calculated as 20 x $3.55 = $71.00. If needed, this amount is converted to the base currency of the account.
Dividend adjustment: -$3.55
Amount credited to account: $71:00
Short position:
Now let's imagine another trader is 20 lots short in NAS100 at the same price of $18,000.00 and the dividend adjustment decreases the total value of the index by $3.55.
Normally, this would result in a net gain for the trader. However, as this decrease in value is not a true profit for the shorting trader, we would debit the trader's balance to account for the dividend adjustment.
The same calculation is used, but the amount is debited from the trader account:
20 x -$3.55 = -$71.00. If needed, this amount is converted to the base currency of the account.
Dividend adjustment: -$3.55
Amount credited to account: $71:00
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