What costs are involved in CFD trading?

Surprises can be very hit-and-miss. Some people love a surprise, some people loathe a surprise. Of course, it depends on the type of surprise you get – a winning lottery ticket is far more welcome than coming home to find your dog has torn your sofa to pieces. Perhaps something everyone can agree on, however, is that nobody likes a surprise that leaves you out of pocket.


If you’re new to CFD trading, you might not be aware of some of the associated costs that come with carrying out a trade. These fees can vary from broker to broker (so you should always check and choose carefully!), but it’s worth getting to know the transactional costs out there. That way, you can avoid any unwanted surprises and also plan your budget accordingly.


So, what do you need to look out for?

“It takes money to make money.”

There are two types of fees you might be subject to when you carry out a trade: trading fees and non-trading fees.


Trading fees are charged when you carry out a trade. Let’s take a look at some of the most common trading fees you might encounter. 


Many brokers will charge commissions for the use of their services, usually amounting to 0.1-2% of the trade’s underlying value. However, some brokers will offer zero-commission trading on certain securities; for instance, with Eurotrader, all stock CFDs are completely commission-free!


Traders will also typically have to pay spreads. This refers to the difference between the buy (bid) and sell (ask) price, and it reflects the supply and demand of a specific asset. Typically, higher volatility will lead to wider spreads (which are more costly), and lower volatility will result in narrower spreads. 


Some brokers might charge conversion fees if you trade, deposit or withdraw money using a currency that needs converting. For example, if your account is EU-based, but you deposit money from your US bank account, the broker will have to convert your dollars to euros to complete the deposit, and they may charge you for this process. 


Note: we at Eurotrader don’t charge conversion fees. Rather, we do conversions at spot market price – but be careful, as you may be charged conversion fees by your bank!


If you hold positions overnight, you may be charged an overnight fee. This is a daily cost that is calculated based on the size of the trade itself. More common in leveraged trading, these overnight fees are often referred to as ‘swaps’. However, some religious beliefs inhibit the payment or receipt of interest of any kind, which is why some brokers will offer swap-free accounts.


Now, let’s look at non-trading fees. These are the charges incurred which are not directly related to trading itself.


For instance, depending on your broker, you might need to pay a monthly account fee. Similarly, if you’re subscribed to any additional services (such as data feeds, VPS services, etc), you’ll often have to pay for a subscription.


Furthermore, some brokers will charge for withdrawals and deposits. These costs may vary depending on the method(s) used.


Finally, you should also check for whether your broker charges inactivity fees – the last thing you want is to take a break from trading, only to return to a charge you’ve not considered! Any brokers that do charge inactivity fees will specify the time period this will come into effect, so you can plan accordingly.


Eurotrader fees


Eurotrader has thousands of US, UK and European stock CFDs for you to trade, COMMISSION-FREE! Check out our product listings here.


We also don’t charge conversion fees (we do conversions at spot market price), account fees or inactivity fees!


Why and when should you rebalance your portfolio?

Imagine you are at your favourite ice cream parlour, and you have to choose scoops of ice cream that will accompany your crispy cone. You want them all. But how many scoops can balance on the cone? Although there is evidence that you could stuff about 21 scoops (we’ve tested that for you), it doesn’t mean you should. Why? Because all your scoops will begin to melt and be challenging to maintain. Instead, they will end up on your t-shirt, and you will end up dirty and broken-hearted. 


The same applies to your trading portfolio. Building and maintaining a portfolio is not an easy task, as it involves research, targeting and decision-making. One of the main aspects of portfolio management is reducing the risk involved in trading (therefore allowing you to enjoy trading a bit more, too!). 


Portfolio rebalancing is one of the portfolio management procedures where risk mitigation is achieved through the reallocation of the trading assets.


By rebalancing your portfolio, you can keep the desired level of risk and control in a better way your emotions, for example, when volatility keeps you up at night. 


To enjoy both a good night’s sleep and your trading activity, line up your investment with your goals and rebalance your portfolio from time to time. 


When you rebalance your portfolio as a trader, it means that you have to: 

  • Firstly, ensure that your portfolio isn’t dependent on the success or failure of a particular asset class or fund type.
  • Mix various assets as per your trading style, goals and money you can afford to lose, i.e. your risk tolerance.  
  • Add and remove assets in your basket or allocate additional funds to specific assets you are already trading. 

Why and when should you rebalance your portfolio?

“Balance is not something you find. It’s something you create.”

When is the right time to rebalance my portfolio? 


While there is no standard schedule for rebalancing a portfolio, experts recommend examining allocations quarterly or at least once a year. Then, of course, you may restore the balance only when you feel that the allocations are significantly off track. 


Another strategy, apart from reviewing the portfolio in predetermined time intervals, is to check it whenever the trading conditions change or your portfolio has become unbalanced. For example, if your risk tolerance or investment strategies have changed, the time to reshuffle the cards has come.  


As stock performance can vary dramatically, the percentage of assets associated with stocks will change with market conditions. Therefore, when the market moves significantly, you may need to rebalance the weights to match your target asset allocation. A quick reminder: past performance is not always an indication of future performance. 


The same applies when the stock percentage of your portfolio has grown considerably in value. Depending on market performance, you may find a large number of current assets held within one area.


Another case is when your financial needs have changed. Then, you may adjust the overall risk to meet such changing financial needs along with the performance variable. Another right timing for rebalancing your portfolio is when you can sell high and buy low. 


We’re guessing that now you might want to check new assets to rearrange your portfolio. How about exploring Eurotrader’s instruments and spreads? Trade across five asset classes and enjoy Eurotrader’s competitive spreads and fast execution in every market. We’ve got over 2,000 instruments in forex, cryptocurrencies, stocks, commodities and indices that are ready when you are.


Olympic Stocks to watch during Tokyo Games

From the World Cup, to the Super Bowl, to the Olympic Games, mega sports events affect stock markets. There is a strong relationship between the company-sponsors of such events and any unexpected turn while holding such happenings. Also, studies have shown that the stocks of companies linked to medal-winning athletes surge right after every success. 


The 2020 Olympic Games are being held in Tokyo, Japan between the 23rd July 2021 until the 8th August 2021 (yes, the 2020 games in 2021 – thanks COVID) under extraordinary circumstances. 


Unfortunately, there’ll be no spectators enjoying the unique experience and Olympic spirit. Instead, there will just be empty stages and fields, which results in a tremendous economic loss for Japan. What’s more, COVID-19 restrictions, procedures, and COVID-positive athletes keep shuffling the cards.     


At all events, viewing both the stay-at-home Games and the Olympics-related stocks is quite intriguing. Already, the Japanese find themselves in the unlikely position of being top of the medals table, leading investors to look for trading angles.


Keep in mind that, as always, the gains can be short-lived, and even the surest thing can be a risky bet.

Olympic Stocks to watch during Tokyo Games

“The important thing in the Olympic Games is not to win, but to take part...”

“[and]…the essential thing in life is not conquering but fighting well”. Pierre de Coubertin, the father of the modern Olympic Games, summarised the concept of the Olympic spirit in one sentence. 


Of course, the Games have become one of the world’s most influential international marketing platforms since first being held in 1896 Athens. On top of that, there is a substantial economic impact for the countries hosting the Games. 


The following stocks are linked with the Games and are worth watching throughout the Olympics. But first, let’s see who’s taking part and fighting well and who had second thoughts.


Cisco (CSCO.O)

Cisco Systems trades under the ticker CSCO on the NAS.


The global networking giant was announced as one of the Tokyo 2020 Olympic Official Partners in 2016. Previously, Cisco first became an Olympic and Paralympic partner at the London 2012 games. Recently, the networking hardware company announced its participation in the Paris 2024 Olympic games. 


Unlike other companies, Cisco does not face a marketing dilemma and continues to provide full support and presence in the Olympics regardless of the exceptional circumstances. 


Stocks of the routers, switches, software and services vendor had gained 4.48% over the past month before the Olympics.


Toyota (TM.N)

Toyota Motor Corp trades under the ticker TM on the NYS.


Toyota engages in the manufacture and sale of motor vehicles and parts. The company signed on as an Olympic sponsor in 2015 as one of 15 global companies that make up the Olympic Partners (TOP) program. This sponsorship program is the highest level of Olympic sponsorship.


However, the Japanese carmaker and major sponsor distanced itself from the Olympic Games, deciding that they will not air Olympics-related TV ads during the Tokyo Games. 


The decision comes following frustration and lack of support on behalf of the Japanese public for the games as local COVID-19 infections surge.


Coming into today, Toyota stocks have gained 2.88% in the past month.


All in all, trading stocks is fascinating but, at the same time, requires personal growth and knowing how trading works. At Eurotrader, we share an interest and a common goal – to help you invest in your future self. So be a part of our community and open an account or try our risk-free demo to trade your favourite – Olympic-related or not – stocks.


Top tips for choosing stocks

So, you’ve made the decision to trade stocks. Fantastic! But now, you have to choose your stocks, which isn’t as simple as you might think.


It’s like standing in front of a huge wedding buffet that has everything from elevated French hors d’oeuvres to sticky hoisin ribs—countless options – hard choices.


Unlike the buffet situation, there is a massive advantage in picking stocks: you have all the time you need to decide smartly. There is no hurry and no cause for distress; stocks are there forever – unlike the very popular Caviar canapés.    


There are several tips that experienced traders will give beginners on choosing the winning stocks. However, it’s up to you to decide which ones fit your style and trading perspective.


Let’s explore the best practices for cherry-picking your stocks.

Top tips for choosing stocks

“Eeny, meeny, miny, moe, catch a share by the toe”

Set your trading goals: Building a trading plan based on SMART (Specific, Measurable,  Achievable, Relevant, Time-Bound) goals will help you decide what you want and stick with it.


Inform your decision: Do your homework and learn all about stocks’ fundamentals. How does stock trading work? Which stocks are worth the investment in time and money? Explore news and trends and tried-and-true rules and strategies.


Pick an industry: Is healthcare what piques your interest? What about telecom or technology? The stock market consists of 11 (or 12, depending on who you ask) sectors/industries. Choose your favourite, then learn the industry’s leaders, trends and strengths.


Diversify your portfolio: While picking a specific industry may help you at the beginning of your trading journey, you should not forget that picking stocks from different countries and risk profiles (from safe blue-chip stocks to more aggressive options) may help you reduce the risk of holding specific assets. Also, bear in mind that trading experts suggest that your portfolio may contain low percentages of international securities.


Pick competitive companies: Choose companies that consistently beat the stock market and its peers. Explore how the company treats its dividends, its debt-to-equity ratio in line with the industry, and its long-term strength and stability. Some ticker symbols may be more attractive than others, but at the end of the day, only the most attractive will win.


Manage your risk: Build up stock positions with a minimum risk, and plan ahead for rainy days. Invest while taking into consideration a margin of safety. Remember that you should not invest money if you may need it within the next few days, months or even years.


Manage your emotions: Don’t overdo it. Celebrate your wins and embrace your losses. Learning how to control your emotions while trading is complex and needs self-discipline and openness. When you feel more confident with trading, you will then find it easier to identify psychological trading patterns and master the art of emotional control.


All in all, trading stocks needs personal growth and building a solid base. At Eurotrader, we empower, educate and make it easy for everyone to get their trade on. That’s why we offer a series of beginner’s guides to choose from. How about introducing yourself to stocks and learning the ropes?


What does financial compliance mean for traders?

In recent years, regulatory agencies have developed detailed guidance to ensure that financial institutions will intensify compliance initiatives. As a result, there are more laws, directives and regulations than ever designed to protect traders and make financial markets sustainable. Financial institutions and trading brokers need to comply with such legal frameworks to guarantee a secure environment. Fortunately, most of them apply financial compliance with religious devotion. 


Regulators worldwide constantly monitor the markets and try to spot new types of risks to update their instructions accordingly. Apart from financial watchdogs and regulated entities, there is also a third party in the compliance scene: traders and their personal responsibility.


How can traders make a worthwhile contribution and protect themselves from undesired effects?

"Safety rules are your best trading tools”

Picture this: you’re on a mission to purchase the super-duper gadget of your dreams, but it’s a little on the pricey side. However, you’re in luck! You find a random online store where it’s being sold at a much lower price, so you buy it.


When it arrives, you rush to unwrap it, but you quickly realise it’s a bogus, knock-off version of the gadget you originally wanted to buy. So you go to ask for your money back, but you can’t get through to anyone from the online store. In fact, you can’t get through to the website at all, which seems to be down forever.

What does financial compliance mean for traders?

Sadly, the same sometimes happens with brokers. There are many out there which promise you the world in top trading conditions, but they are missing one crucial thing: regulation


A regulatory body monitors brokers to ensure that they do not manipulate the market. In the event that they do, the regulatory body will endeavour to catch them and impose consequences.


Trading with a regulated broker – i.e., one that is licensed to operate in a particular or various jurisdictions – ensures transparency and protection of traders’ interests. Moreover, as trading has a lot to do with risk management, opting for a regulated broker ensures a high level of risk mitigation


Regulated brokers hold segregated accounts, and they do not mix their funds with their traders’. So, for instance, in the unlikely event that a broker goes bankrupt, clients’ funds cannot be used to repay the creditors.


Another aspect of safe trading is that someone trading with a regulated broker can resort to the regulation watchdog and get the assistance they need to resolve the issue in case of an unsettled dispute.


Regulation ensures that brokers abide by the set rules and standards. Aside from the safety of funds and transparency, a regulated broker also abstains from any financial malpractices. 


As such, the trader’s personal responsibility lies in the fact that they should only choose licensed and regulated brokers to protect themselves and their trades.


Is my broker regulated?


In case you missed it, Eurotrader ticks all the boxes as it is licensed and regulated in several jurisdictions. With our experience and support, we enable everyone, including you, to trade fairly, responsibly and confidently.


Why is copy trading so popular?

When entering new territory, it’s always reassuring to have someone with you that knows the field. For many, taking those first steps into the trading sphere can be a little daunting, but fortunately, it’s now easier than ever to learn directly from the experts.


Thanks to copy trading, new investors are getting a more confident start to their trading journey. As a quick recap, copy trading is just what it sounds like: it allows individuals to copy the trades of other investors.


Unlike mirror trading, copy traders are blind to the actual strategy (i.e. you watch the transactions, and not the layout of the process), but they can still gain experience by watching others trade.


Over time, copy trading has grown from being a trading method to a trending one. Today, more new investors are engaging with copy trading for its various perks, which help to give learners the best possible start.


So what is it about copy trading that has made it so popular?


Learning from the best

For new traders especially, copy trading can be a great way to see what makes good traders successful. With copy trading platforms, you can simply do what the experts do. In some cases, discussions will simultaneously take place on social media, so you can learn the whys and hows of each decision. This can be a really effective way for new traders to learn – and maybe become traders-to-copy themselves!


Of course, you might wonder what’s in it for the experts; usually, platforms will pay traders-to-copy when people mimic their trades.

Avoid rookie mistakes

By following experienced traders, new investors can learn to trade without making common beginner mistakes. There are many valuable lessons to be learned from knowledgeable traders, such as the importance of having a diversified portfolio, as well as how to think with your head and not your heart. 


Having said that, you must be mindful that an experienced trader is not a psychic (!), so you can’t be certain that each of their trades will be lucrative or risk- and mistake-free.

Saving time and effort

If time is money, then copy trading is a worthy investment. By bypassing the bulk of the work, copy traders can get started straight away, even with a limited trading knowledge.


For those who are eager to become an expert themselves, this free time could be spent reading up on copy trading blindspots. This includes understanding fundamental and technical analysis or learning to devise your own strategy. The added bonus of having copy trading experience is that you already understand the basic transactional framework of trading, so you can move on and flesh out your knowledge more efficiently.


Copy trading offers new traders a simple and effective way to get into trading, without excessive risk. For inexperienced traders, copy trading provides an option to learn while doing, while also avoiding mistakes that could cost them. What’s more, copy trading offers an easy route into trading that gives new practitioners a chance to do their research without having to halt their inclination to trade.


If you’re looking to get started with copy trading, sign up to a Eurosocial account today!


Can trading be LGBTQ+ friendly?

June is Pride Month, a month dedicated to further awareness, understanding and cultural acceptance of lesbian, gay, bisexual, transgender, and queer (LGBTQ+)* people.


As well as acknowledging the ongoing struggle for civil rights experienced by the LGBTQ+ community, Pride Month also commemorates the Stonewall riots, which took place in 1969 New York. The protests resulted from a police raid of a gay bar during a time when even dressing up as a member of the opposite sex was illegal. 


The Stonewall riots catalysed LGBTQ+ activism both in the States and the rest of the world. Fifty-two years later, and much hard work has gone into the civil rights of the community. However, there is still more work to be done.


More than ever, businesses are under pressure to improve their internal LGBTQ+ practices. However, this has led to ‘rainbow-washing’, a distasteful practice in which companies only show support in marketing terms – typically by using a rainbow-coloured version of their logo during Pride Month – and doing nothing else to support the community for the remainder of the year.


Of course, working towards LGBTQ+ equality and diversity in the workplace is a key endeavour for the LGBTQ+ movement. As such, companies should ensure they have policies in place to defend LGBTQ+ rights and support the cause. While these policies should be implemented for the right reasons and not just credit, companies who ‘get it right’ are recognised and appreciated by the community.


At Eurotrader, we are very clear on what we consider to be LGBTQ+ friendly companies and, consequently, what we class as LGBTQ+ friendly trading. Our criteria stem beyond just businesses that happen to have, say, LGBTQ+ members of their senior management; rather, we acknowledge the businesses that follow inclusive policies and practices.

Identifying LGBTQ+ friendly companies for your portfolio

The Human Rights Campaign’s annual Corporate Equality Index (CEI), which tracks company LGBTQ+ policies, is an excellent starting point.


According to the Corporate Equality index, 767 places were designated as the “Best Places To Work for LGBTQ Equality” in 2021. The figure may not be that impressive, but it had come a long way from the 13 first companies constituting the index when it was first launched in 2002. 

Can trading be LGBTQ+ friendly?

For example, Google [Alphabet Inc. (GOOG)] has long been a strong supporter of the LGBTQ+ community. In fact, the company has a specific support group for the LGBTQ+ community, known as “Gayglers”. What’s more, Google provides a clear statement about inclusivity, diversity, and welcoming underrepresented communities in the workplace. 


Then, we have IBM. IBM was among the first companies to include a nondiscrimination policy in 1984, and it has continued to support diversity and equality through various campaigns. For example, IBM’s “Be Equal” initiative pursues an open and welcoming environment regardless of sexual orientation, gender expression, or gender identity. Further, IBM does reverse mentoring, where LGBTQ+ employees mentor up the business to someone very senior. The purpose is to allow them to work with people and units to exchange information on challenges LGBTQ+ workers may face.


Finally, the Coca-Cola Company (KO) has scored 100% on the Corporate Equality Index every year since 2006. In addition, the multinational giant formed a Business Resource Group specifically to address LGBTQ+ issues. The company also supports various actions, projects, and initiatives towards LGBTQ+ rights, such as the Gay & Lesbian Victory Fund and The Trevor Project.


Do you want to build an LGBTQ+ friendly portfolio? Then, find your perfect match by choosing stocks offered by the companies included in the CEI 2021 and find them in Eurotrader’s stocks list.


*This article follows GLAAD’s guidelines (Media Reference Guide – 10th edt) in using the respective terminology.



Tips for young traders: Start to ask questions

Meme-stock mania this year affirmed what fintech analysts had already observed before. Gen Zs have turned to trading, and a new generation is taking over the financial markets.


While some of these newbies consider themselves investors and trade small, they often don’t mind taking on more risk whenever they see an opportunity.


Considering the exposure of the markets’ novices to social media and their digital skills, they are keener on engaging with trading apps than their parents.


One central question is how Gen Zs educate themselves about the risks involved in trading complex instruments, such as CFDs, and how they make informed decisions.


When it comes to learning how the markets work, young traders aged 18-24 turn to social media. Surveys have shown that TikTok, YouTube and Instagram make up the lion’s share of the platforms that younger traders visit to seek advice.


Although many of the Gen Z traders find trading cool and their attitude is more towards the YOLO mentality, many take trading seriously.


When dealing with money, any slips may result in a significant lifestyle impact. That is why trading responsibly is so crucial to prevent any trading harm.

"Magic mirror in my hand, who is the safest in the land?"

When you live on the Internet of Things, there is no excuse for having your digital eyes and ears off. Traders need to be mindful and ask themselves questions before starting to trade.

Tips for young traders: Start to ask questions

How much risk can I handle?


Risk management is a fundamental skill that any trader must acquire and improve. Do you remember when you were young and sneaky, and you were taking cookies from the jar? You were smart enough to get some of them unnoticed. You had to be; otherwise, it would have been too easy for your mum to find out. The lesson is: don’t take on more risk than you can handle.


Do I fully understand what I am trading?


Before starting your trading journey, ask experienced travellers and don’t just base your knowledge on random TikTok influencers. Some of them are serious and want to ensure that the new generation of traders take themselves seriously too, but you must still exercise caution. Read, search, watch, and fake till you make it with a demo account. Dip your toe in each market before diving in headfirst.


Is my broker regulated?


Trading with regulated brokers means more safety and reliability. Your broker facilitates your order execution and holds your money in your online trading account. So, choosing a broker of trust is a must. Apart from the safety of funds and transparency, a regulated broker abstains from any financial malpractices. 


Apart from the above questions, you should never forget that lifelong learning is essential for trading. So whether you are a Gen Z trader or one of those who witnessed the launch of the Facebook newsfeed (yes, young ones, there was a time when Facebook did not have one), do not stop learning if you want to keep earning.


In case you haven’t spotted it yet, Eurotrader has a trading academy where you can train up and trade up right here, right now. How about starting from the fundamentals by diving into our digital ebook library?


Top 5G stocks to watch now

The other day while I was in the middle of a Zoom call, my 5-year-old son stormed into my remote office to let me know that his “nanny” was out of order. The download of his favourite Netflix show, which would offer me some peace of mind to join my virtual meeting, stopped. 


The funny incident made me reflect on how much we are now – more than ever – in need of higher internet speeds and glitch-free mobile videos. Apart from supporting my bad parenting practices – working from home in the company of a toddler in the middle of a pandemic drives you to find otherwise unacceptable solutions – wireless communication is a must. WiFi networks are just not enough.   


As the world goes increasingly mobile, the existing spectrum bands cannot handle the thousands of devices trying to gain mobile access simultaneously. 5G, the next generation of mobile internet connection, promises new services and much faster speeds than we have been treated to so far.   

What are 5G stocks? Why should you watch them?

Although 5G has certainly made some enemies, the next-gen technology also has many fans. As wireless 5G companies expand their networks, some of the 5G-related stocks are gaining ground.


The reopenings following last year’s worldwide lockdowns are pushing the demand for faster cellular broadband coverage and capacity. 


5G stocks have fluctuated over the last 12 months. However, tons of dollars have been spent on upgrading technology and marketing 5G services. Wireless firms, mobile services providers, tech companies building 5G ecosystems, chipmakers win big from the 5G market.


With a lot more growth around the corner, 5G stocks are here to stay and boost the stock market. 

Which 5G stocks shall I watch right now?

Let’s get straight to the point (we know why you’re really here): which 5G stocks should you be keeping a beady eye on? Whether you’re trading physical stocks or speculating with CFDs, the following stocks are worth watching: 

Top 5G stocks to watch now.

  • T-Mobile US (NASDAQ: TMUS). T-Mobile is one of the largest US wireless network operators along with AT&T and Verizon Communications. Controlled by Deutsche Telekom (DTEGY), its stock leads the industry to be ahead of its competitors. 2021 will probably be a peak investment year as T-Mobile is investing in a 5G network, among others. 
  • American Tower Corporation (NYSE: AMT). American Tower Corporation is based in the US and is a tower leasing company. Along with Qualcomm (QCOM), the stock was one of the first stocks that gained momentum when the 5G technology boomed. Tower companies stand to gain from 5G as more towers will be required to place the 5G antennas and infrastructure. 
  • Qualcomm (NASDAQ: QCOM). Qualcomm is one of the largest modem and mobile processor vendors that benefited from the 5G upgrade cycle. The US company is regarded as a 5G wireless technology leader and has already taken place in the 5G market with proven performance.
  • Ericsson (NASDAQ: ERIC). Ericsson is one of the most renowned telecommunications and networking companies worldwide. Wireless telecommunication providers such as Ericsson are making strategic investments in 5G. As the 5G networks expand, Ericsson will likely witness robust demand. The company announced an increase of 13% in year-on-year adjusted sales for the last financial year, driven mainly by 5G.
  • Apple (NASDAQ: AAPL) – The smartphone giant has entered the 5G smartphone era on the right foot. Apple isn’t always the first to bring new tech into smartphones. However, the iPhone 12 granted Apple users access to the latest wireless technology and ranked its stock among the top 5G stocks. 

Keep in mind that while companies building and supplying 5G networks right now are hot, in the future, a vast number of industries will benefit from 5G. From internet and cloud-computing firms to carmakers and smart device makers, they will all enter the race and capture long-term value. So, keep your eyes open to find the right trading opportunity for you. 


It appears that the 5G market’s momentum is expected to last for a long time to come.


Want to freshen up your stock trading ABCs? Beginner’s Guide to Stocks is the right place to visit.       


Despoina Fouska is a content writer in the FinTech industry, a coffee addict and enjoys outdoor movie nights. Despoina holds a Bachelor’s in Political Science and a Master’s degree in Journalism.


CFDs and dividend stocks – what should I expect?

One quick win a trader can tap into is picking the top dividend stocks to trade. In terms of ‘safety’ and outperformance in the long run, dividend stocks are among these low-hanging fruits that are easier to pick and taste. 


When it comes to stock CFDs, traders get confused and don’t know what to expect. Let us help you to untangle the knot of stock CFDs – or share CFDs. A pleasant spoiler: things are much less complicated than you may think. 

What are dividends? How do they work?

Α dividend is a distribution of a company’s profit regularly made to the shareholders in cash or as additional shares. Dividends are typically paid out quarterly or semi-annually to the investors that own the underlying assets. Through dividends, an investor can assess the financial health of a business.


In that way, dividend stocks ensure an income for the shareholders. However, as there are different types of stocks, not all stocks pay dividends – so why would someone buy a stock that does not payout?


Non-dividend stocks can lead to greater growth in share price and value for investors. Companies that don’t offer dividends are typically reinvesting profits so that the stock price can rise in the long term.  

What is an ex-dividend date?

The ex-dividend date is the final day where a potential shareholder can buy a stock and is entitled to the upcoming dividend payment. It’s usually one business day before the company pays out the dividend.


Traders who open a position on or after the ex-dividend date are not entitled to the dividend payment. 


A tip to remember is that the value of a stock will fall on the ex-dividend date due to the dividend payout.

CFDs and dividend stocks - What should I expect?

Dividend adjustment payments in CFD trading – do stock CFDs pay dividends?

You probably have already realised that there are various charges and credits to your account while you hold an open CFD position. The dividend adjustment is just another one of these.


If traders hold a long position in shares with CFDs and hold the day before the ex-dividend date, they become entitled to a payment equivalent to the dividend amount. Similarly, if traders hold a short position on that instrument, a dividend adjustment will be debited from their account.


Want to brush up further on your knowledge of stock trading? Look no further than our Beginner’s Guide to Stocks.