At FXPesa, we quote a rolling cash price for our indices. Therefore, whenever a company which is a constituent of an Index, posts a dividend, it will affect the price we quote. For Example:
If a US30 company pays a dividend then that will affect the US30 index when it is paid, as its share price will automatically fall by the value of the dividend.
This will then cause the US30 index to fall depending on the percentage weighting that the company has in the US30.
If you are long on a position, dividends will be credited based on the rate and your trade volume. If you are short on a position, then dividends will be debited based on the rate and your trade volume.
If BP was to pay a dividend then that will affect the UK100 index when it is paid, as BP’s share price will automatically fall by the volume of the dividend, this in turn will cause the UK100 index to fall depending on the percentage weighting that BP has in the UK100.
Dividends are a distribution of a portion that a company’s earnings have been decided by the board of directors, to a class of its shareholders.