Dividend is an economic term for regular payments to shareholders of the company. Their frequency may vary, but as a rule, payments are made on a quarterly, semi-annual or annual basis. The Board of Directors calculates them on the day called the registration date. The amount due is transferred on the next day called the payment date. A preliminary date is determined a couple of days prior to the registration date. On this day, the list of shareholders entitled to dividends is made up. According to the rules, only those investors who have invested in shares before the preliminary date are eligible for the dividends.
It is not the case with contracts for difference (or CFD NASDAQ): the payment of dividends takes a different form, but the point is the same. The holders of contracts for difference get paid a Dividend Adjustment. The ex-dividend date is similar to the preliminary date. On this day, the client's open positions are estimated. As a result of the estimation, the contenders for the payments and write-offs are determined. If a client has an opened long position (buy),the dividend adjustment is credited on their trading account, if they have an opened short position (sell) - the amount is written off from the client's account.
Dividend adjestment is calculated by the following formula:
Shares*Dividend Payout=Dividend Adjustment
On February 4, 2016, APPLE INC (#AAPL) Board of Directors pays a quarterly dividend of $0.52 per share.
Let us say that as of ex-dividend day (February 4, 2016) you have an opened long position (BUY) in the volume of 3 lots in #AAPL (APPLE INC). Now you can calculate the amount of dividend adjustment by the above-described formula:
1 standard lot = 1 share, which means you bought 3*1=3 shares.
3 (number of shares) * 0.52 (dividend amount) = 1,56$ (dividend adjustment)
Thus, your payment will amount to 1,56$.
Respectively, dividend adjustment is calculated by the same formula if as of ex-dividend date you have an open short (SELL) position in the above instrument.
In this case 1,56$ will be written off.