Earn Double Your Current Stock Market Dividend Returns by Using a CFD Dividend Trading Strategy
Would an extra leverage compared to the current amount of dividend credit be useful? I sure hope so. Today we are going to have a look at some CFD Dividend trading basics and how you can easily secure your dividends whilst trading Contracts for Difference.
Contracts for Difference are remarkably easy to understand as they simply replicate the underlying share market so that any corporate actions on stocks happen to the CFD. For example if you bought 1000 CFDs in National Australia Bank (NAB) and it paid a 60 cent dividend then your account would be credited with $600.
When do CFD Dividends get paid?
Regular CFD Traders will know that CFD dividends are paid much sooner that the normal stock market dividends. Most CFD providers credit your account on the day of the ex-div date or the very next day.
Multiply your dividend by 3 times using leverage
The greatest advantage of using CFDs is access to leverage and most providers only require a small margin of say 10% up front. As a result of this leverage you can dramatically increase your trading returns. If for example you bought 1000 CFDs in AMP and received a $300 dividend, trading at 3 times leverage would now pay you $900. Exciting returns aren’t they.
What about Franking Credits?
Unfortunately the CFD market doesn’t pay any franking credits. Franking credits simply mean the tax has already been taken into consideration and if you earn a 100% fully franked dividend on the stock market then you don’t pay any tax on the returns. The ASX requires share holders to own a stock for 45 days prior to the ex-div date before they will pass on the franking credits.
Don’t let sub standard returns hold you back. Add a Dividend strategy to your CFD trading and watch the increase percentage returns. Knowledge is power but you need to act on this in order to make it happen.
