A dividend trading opportunity for you?

Bovis Homes is due to pay a dividend of 64p per share/5.6% on Thurs, 27th Sept

• The chart shows the last 7 months of Bovis Homes’ share price movements.
• Bovis pays a 64p dividend. Currently at 1150p (at time of writing).
• Shares -12.0% from 2018 highs; +14.2% from 2018 lows; -1.8% year-to date
• All CFD positions held over 4.30pm on Weds, 26 Sept will be paid a dividend at 7:15am on Thurs, 27 Sept.
• Those using Bovis Homes CFDs receive the dividend 57 days earlier than those in using shares.
• On the day the shares trade ex-dividend the share price tends to drop by the same amount

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Trading Bovis Homes– An Example

Let’s say you like Bovis Homes , and would like to get the 64p/5.6% dividend. You decide to buy exposure to £10,000 worth of Bovis Homes using a CFD, at the current price of 1150p. To do this, you need £2,000.

Shares that go ex-dividend typically fall by the amount of the dividend on the ex-dividend date. Many shares then tend to recover over a period of time, helped by dividends being reinvested, creating a dividend recovery trade opportunity.

Assuming Bovis Homes shares recover to their pre-dividend share price, your profit from the dividend would be £560, from your initial investment of £2,000.

Be aware that the share price could fall or rise, which could mean that you make an overall loss or increased profit on the position. For example, let’s assume that GVC Holdings falls 5% at the same time it pays the dividend. You overall net loss on your £10,000 position would be £500.

This is provided for information purposes only. It should not be taken as a recommendation.