Short positions and dividends

[ermejoromano]

Hi, I am completely new to the CFD world (although am investing long term since many years).

I have a very basic question: If I were to acquire a short position in a stock on the evening before it’s ex-dividend date and would sell that position at the end of the ex-dividend day, would I have to pay the dividend?

I would assume that in that timeframe the stock price would drop by about the same as the dividend, so how can I profit from that?

[Scrooge_McCodf]

@ermejoromano

have a very basic question: If I were to acquire a short position in a stock on the evening before it’s ex-dividend date and would sell that position at the end of the ex-dividend day, would I have to pay the dividend?

Yes. There are no free lunches in investing.

[gforce78]

No because CFD are a derivative, you would pay the overnight holding charge and also the spread may be wider to consider the dividend impact. So you dont DIRECTLY pay the dividend as you dont own any shares you are playing 212 you are not trading on the market.