National Grid is due to pay a dividend of 16.08p per share/1.9% on Thurs 22 Nov

• The chart shows the National Grid share price movements since mid-February.
• National Grid pays a 16.08p/1.9% dividend. Currently at 835p (at time of writing).
• Shares -4% from 2018 highs; +17.2% from 2018 lows; -4.45% year-to date.
• All CFD positions held over 4.30pm on Weds, 21 Nov will be paid a dividend at 7:15am on Thurs, 22 Nov.
• Those using National Grid CFDs receive the dividend 35 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 National Grid – An Example

Let’s say you like National Grid and would like to get the 16.08p/1.9% dividend. You decide to buy exposure to £10,000 worth of National Grid using a CFD, at the current price of 835p. 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 National Grid shares recover to their pre-dividend share price, your profit from the dividend would be £190, 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 National Grid 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.