A dividend trading opportunity for you?

William Hill is due to pay a dividend of 4.26p per share/1.9% on Thurs 25 Oct

• The chart shows the William Hill share price movements since April.
• William Hill pays a 4.26p/1.9% dividend. Currently at 227p (at time of writing).
• Shares -33% from 2018 highs; now trading at 2018 lows; -29.3% year-to date.
• All CFD positions held over 4.30pm on Weds, 17 Oct will be paid a dividend at 7:15am on Thurs, 18 Oct.
• Those using William Hill CFDs receive the dividend 25 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 William Hill – An Example

Let’s say you like William Hill and would like to get the 4.26p/1.9% dividend. You decide to buy exposure to £10,000 worth of William Hill using a CFD, at the current price of 227p. 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 William Hill 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 William Hill 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.