HeffCap is eager to spearhead its new Dividend Focused CFD Fund which will hopefully protect itself and its investors from the dire economic situation following the hit of their Currencies, Metals and Private Equity Funds. Moreover, there are also fund focusing on agriculture, metals and currencies in other companies as well.
Contract for Differences otherwise known as CFDs is a form of a derivative product that draws its share price from an existing underlying index or stock that it is actively monitoring.
Contracts for difference are very similar to trading typical stocks except that traders require a small amount of money to pay as up front. There are other slight differences such as CFD leverage and CFD finance and for anyone who is discerning to trade this derivative instrument should contemplate the risks involved in CFDs which riveted most ETF’s being traded in the CFD markets as well.
Dividends: What are they?
CFD holders are given the sanction to have dividends just like those who are doing stocks and trade as long as you belong in the CFD before the ex – dividend date expires. Basically, if you own a stock which is long, then you are entitled to a credit equal to the amount of the dividend and if your position is short then you are given a debit with an amount of the current dividend.
For you to receive a credit for a CFD dividend, you must first own the CFD prior to the ex – dividend date. In addition, the dividend you receive or lose will either be credited or debited to your existing account on the same date it goes with the prior dividend.
Benefits of the fund
- Profiting from falling markets through short selling.
- Taking full advantage of short term price swivelling in the stock market.
- Taking advantage of the lower rates in brokerage and commissions.
- The ability to hedge present shares in portfolios
- Taking advantage of the versatility of leveraging through the use of CFDs
Accessing international stock markets by using one account
Who is in control of the stock?
When trading contracts for difference, you really do not have to physically hold the stock per se and you need not get a contract note as you normally would do with normal trading shares. What really happens is that you are simply trading the price difference between where you intend to go in or out of your trade.