Why Trade Shares with Onsafx?
Shares CFDs Offered by Onsafx
- Minimum Spread is subject to market volatility.
- The prices of shares CFDs may be affected by corporate actions such as dividend payouts, stock splits, or mergers. For more details, please refer to the Corporate Actions announcement.
- Clients holding shares CFDs are not entitled to the rights of the underlying shares due to the lack of actual ownership of those shares.
How Do I Trade CFD Shares with Onsafx?
When trading a single CFD share, corporate actions enforced by the related company may affect your positions. One such example is a cash dividend. If a dividend is issued, Onsafx will adjust your account accordingly. Here’s how:
- Clients holding BUY positions in a CFD share on the ex-dividend date will receive a positive cash amount equivalent to the dividend payout. The deposit will be made into your trading account based on the lot size and proportion of the dividend-paying securities.
- Clients holding SELL positions in a CFD share on the ex-dividend date will be deducted a cash amount equivalent to the dividend payout. The withdrawal will be made from your trading account based on the lot size and proportion of the dividend-paying securities.
Adjustment Formula:
Number of shares × Dividend per share = Adjustment amount
(If your account is denominated in USD, the adjustment will be converted to USD based on the spot exchange rate.)
Cash Dividend Example:
For instance, if Apple Inc. (AAPL) announces a $0.01 USD cash dividend to its shareholders, the share price will reflect the corporate action and drop by $0.01 USD on the ex-dividend date. Onsafx will make a cash adjustment for clients holding open positions in the Apple Inc. CFD.
If you are holding 10,000 BUY shares, the cash adjustment would be:
10,000 shares × $0.01 = $100 USD cash dividend
Note: If you hold 10,000 SELL shares, Onsafx will deduct $100 USD from your account.
Share Split or Reverse Share Split:
If a company announces a share split or reverse share split, the share price will change as follows:
- Reserve Share Split: CFD price will increase.
- Share Split: CFD price will decrease.
These corporate actions will affect your open positions in the relevant CFD.
Dividends:
Dividends are a distribution of a company’s earnings to its shareholders, typically announced on a semi-annual or quarterly basis. They are subject to approval by the company’s board of directors and may be issued as cash dividends or share dividends.
Ex-Dividend Date:
The ex-dividend date determines who is entitled to a declared dividend. If you buy the stock before this date, you will receive the dividend. If you buy on or after the ex-dividend date, you will not receive the dividend.
