A dividend trading opportunity for you?

888 is due to pay a dividend of 4.2c per share/1.7% on Thurs 4 Oct

• The chart shows 888 share price movements since mid-Sept.
• 888 pays a 4.2c/1.7% dividend. Currently at 200p (at time of writing).
• Shares -40.1% from 2018 highs; +2.8% from 2018 lows; -28.9% year-to date
• All CFD positions held over 4.30pm on Weds, 3 Oct will be paid a dividend at 7:15am on Thurs, 4 Oct.
• Those using 888 CFDs receive the dividend 20 days earlier than those using shares.
• On the day the shares trade ex-dividend the share price tends to drop by the same amount

Click to enlarge

Trading 888 – An Example

Let’s say you like 888, and would like to get the 4.2c/1.7% dividend. You decide to buy exposure to £10,000 worth of 888 using a CFD, at the current price of 200p. 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 888 shares recover to their pre-dividend share price, your profit from the dividend would be £170, 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 888 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.