When trading indices, you do not own the underlying shares, meaning you do not receive dividends directly. However, the economic impact of dividends is accounted for through dividend adjustments.
How do dividend adjustments work?
When the constituent stocks of an index pay dividends, the overall value of the index decreases. Adjustments are typically made on the ex-dividend date if a dividend payment is expected on the underlying instrument.
Dividend payments are directly reflected in the price of the index CFD.
How does this affect my account balance?
If you have an open position at the time of the adjustment, zero material impact on the account balance is guaranteed. Depending on the direction of the position, the account is either credited or debited to offset the exact amount by which the unrealized financial result (profit/loss) has changed.
Which instruments are subject to dividend adjustments?
Dividend adjustments are applied only to stocks and Cash Indices. Here is the main difference:
Stocks and Cash Indices: Adjustments are performed upon the arrival of the ex-dividend date.
Futures: No dividend adjustments are applied. The futures price is pre-adjusted downward by the discounted amount of expected dividends, which neutralizes the impact of the dividend gap on the underlying asset.