what is the dividends ?
a dividend is a way of a company to distribute a percentage of its net earnings to its shareholders the dividend amount is decided by the company s board of directors and can be issued as a cash payment shares or other assets most commonly the dividend is determined in terms of money per share which means that each shareholder will get a dividend respectively to his holdings for example in case you own 1 000 shares and the dividend announced is 3 per share you will get 3 000 other common way of quoting a dividend is terms of percentage of current market price which is also known as yield for example if you hold 1 000 shares the current market price is 100 and the dividend announced is 2 it means you will get 2 for every share you hold which are 2 000 other ways to pay a dividend are shares giving out shares instead of cash property interim and more when a dividend is paid the company s value is immediately effected for the simple reason that the cash it is giving out as a dividend will no longer belong to the company so its share price decreases in the rate of the dividend payment the change in the share s price is taking place in the ex dividend date as a result fortrade needs to credit debit the clients holding the dividend paying share during the ex date in order to cover for the paid dividend and making sure that all of our shareholding clients will receive the dividend and won t be effected by fake declines of the share s price the term fake refers to market price movements that are not a result of real market conditions but a result of a synthetic conditions like dividend payout all client holding a dividend paying share in a short position during the ex dividend day will be debited in the size of the dividend 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 in 2 in the ex dividend day meaning that you will earn more money in your short position due to the fake share price movement so fortrade will have to charge that exact amount with no further fees or commission to your commission p l before the ex dividend day 1 000 110 100 10 000 shares amount opening price market price before the dividend payout p l after the ex dividend day assuming there were no other real market effects on the share price 1 000 110 98 12 000 shares amount opening price current market price dividend charge 1 000 2 2 000 shares amount dividend paid per share final p l calculation 1 000 110 98 2 000 10 000 shares amount opening price current market price dividend amount all client holding a dividend paying share in a long position during the ex dividend day will be credited in the size of the dividend for example if you hold 1 000 shares in a long position in 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 in your long position due to the fake share price movement so fortrade will have to credit you with that exact amount with no further fees or commission to your commission p l before the ex dividend day 1 000 100 90 10 000 shares amount market price before the dividend payout opening price p l after the ex dividend day assuming there were no other real market effects on the share price 1 000 98 90 8 000 shares amount current market price opening price dividend credit 1 000 2 2 000 shares amount dividend paid per share final p l calculation 1 000 98 90 2 000 10 000 shares amount current market price opening price dividend amount all dividends credits charges will appear in the commission column of the position 