Dunelm is due to pay a dividend of 19.5p per share/3.3% on Thurs 15 Nov

• The chart shows the Dunelm share price movements since July.
• Dunelm pays a 19.5p/3.3% dividend. Currently at 597p (at time of writing).
• Shares -17% from 2018 highs; +29% from 2018 lows; -13.8% year-to date.
• All CFD positions held over 4.30pm on Weds, 14 Nov will be paid a dividend at 7:15am on Thurs, 15 Nov.
• Those using Dunelm CFDs receive the dividend 17 days earlier than those 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 Dunelm – An Example

Let’s say you like Dunelm  and would like to get the 19.5p/3.3% dividend. You decide to buy exposure to £10,000 worth of Dunelm  using a CFD, at the current price of 597p. 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 Dunelm shares recover to their pre-dividend share price, your profit from the dividend would be £330, 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 Dunelm falls 2% at the same time it pays the dividend. You overall net loss on your £10,000 position would be £200.

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