DividendTrader.com.au

CFDs allow you to benefit from share price gains (and falls) but are adjusted for dividend amounts. Different CFD providers treat franking credits differently, but generally they do not pass on any of the franking credits benefits to either short or long CFD holders – always check how your CFD provider treats dividend and franking credits before holding any position over ex div date. A general rule is "don't hold CFDs over ex div date if the dividend is franked".

CFDs are great tools for trading the run up to ex div date and also the post div bounces.

The advantages of CFDs include a relatively small amount of capital tied up to get a large exposure to a stock, but this leverage can also be a big disadvantage if a share price moves against you – your total risk is the total value of the position, not just the amount of capital used to open the position. Stop losses and guaranteed stop losses (GSLs) can be used to lessen the risk. GSLs cost a little more, but can be an important tool to protect your capital.

IGmarkets (see link below) provide GSLs on a long list of stocks and have a choice of platforms available. The L2 dealer platform is by far the best as it allows you to place orders in the "real" market, instead of being a price taker. This means that you can often buy a few cents cheaper and sell a few cents higher than you could with other platforms/providers. This can mean a lot of extra $$$$ in the account at the end of the year.

Remember to read our disclaimer and be sure to read the PDS from IG and understand the implications of trading before you trade.

Click on the link below to join IGmarkets - our preferred CFD provider and help to maintain DivendTrader reports as a free service, and make sure you check out the L2 Dealer trading platform.