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Your Daily Statement

Your Daily Statement

Corporate Actions

What is a Corporate Action?
A corporate Action can be defined as an event that brings about a material change to a stock, or an event that is initiated by a firm that has an impact on its shareholders. Dividends, stock splits, acquisitions, mergers and stock buy backs are all examples of Corporate Actions.
Dividends
If you hold CFDs and a company announces a dividend, your account will be credited/ debited on the day the stock goes "Ex-Dividend".

Typical Example:

  • Vodafone announces a 15p dividend
  • You currently hold 3,000 Vodafone CFD shares
  • 15p x 3,000 = 450.00
  • 450.00 will be credited to your CFD account.
  • (If you hold a short position going into the ex-dividend date then your account will be debited for the same amount)

On your daily statement the dividend will appear under Ledger Activity as:

Corp Action: Cash Dispersion Corp Action:
Cash Disp XXX paying YYYY

(Where XXX is the instrument and YYY is the amount of the Corporate Action).

Stock Splits
Stock Splits are used when the value of a company's stock is getting too high. The company will basically offer more stocks in the company but at a lower price.

Typical example:

  • You hold 300 contracts in Y at a price of 1,607 per share
  • Company Y announce on X date, that it will be issuing a stock split of 5 for 1.
  • Hence for every 1 stock you hold you will be issued 5.
  • Now you will hold 1500 contracts at the reduced price of 321.4.
  • Note the overall contract value remains the same (300 contracts x 1,607 = 4,821, 1500 contracts x 321.4 = 4,821)

On your daily statement the stock split will appear under Ledger Activity as

Corp Action: Consolidation of ZZZ
X for Y

(Where ZZZ is the company, X and Y are the terms of the stock split).

Rights Issues
With a Rights Issue a company will offer its shareholders a chance to buy newly issued shares, usually at a discounted price, before it is offered to the public.

CMC Markets will endeavour to send you an email outlining the details of the rights issue.

 
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