A dividend trading opportunity for you?
3i is due to pay a dividend of 15p per share/1.9% on Thurs 13 Dec
- The chart shows the 3i share price movements since late April.
- 3i pays a 15p/1.9% dividend. Currently at 782p (at time of writing).
- Shares -22.54% from 2018 highs; +2.3% from 2018 lows; -14.2% year-to date.
- All CFD positions held over 4.30pm on Weds, 12 Dec will be paid a dividend at 7:15am on Thurs, 13 Dec.
- Those using 3i CFDs receive the dividend 20 days earlier than those using shares.
- On the day the shares trade ex-dividend the share price tends to drop by the same amount.
Trading 3i – An Example
Let’s say you like 3i and would like to get the 15p/1.9% dividend. You decide to buy exposure to £10,000 worth of 3i using a CFD, at the current price of 782p. 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 3i 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 3i 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.