A dividend trading opportunity for you?

Crest Nicholson is due to pay a dividend of 11.2p per share/3% on Thurs, 20th Sept

• The chart shows the last 1 month share price movements on Crest Nicholson.
• 1 month lows were at 341.7p. 1 month high at 398.9p. Currently at 371.9p (at time of writing).
• All CFD positions held over 4.30pm on Weds, 19 Sept will be paid a dividend at 7:15am on Thurs, 20 Sept.
• Those using Crest Nicholson CFDs receive the dividend 15 days earlier than those in shares.
• On the day shares trade ex-dividend the share price tends to drop by the same amount

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Trading Crest Nicholson – An Example

Let’s say you like Crest Nicholson, and would like to get the dividend. You decide to buy exposure to £10,000 worth of Crest Nicholson using a CFD, at the current price of 371.9p. To do this, you need £2,000.

For the purpose of this example, let’s assume Crest Nicholson pays a dividend of 3%. 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 Crest Nicholson shares recover to their pre-dividend share price, your profit from the dividend would be £300, 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 Crest Nicholson 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.