There's a ton of information that you need to be aware of regarding dividends and that includes, investment opportunities, payments, recommended trading practices and a whole lot more.
Follow the table of contents below to get all the information you need about dividends as an eToro trader.
In financial terms, a dividend is the form of distributing a percentage of profits by a listed corporation to its shareholders. This usually follows a profitable year for a corporation allowing it to share a portion of its profit as "dividends" to its stockholders.
Other than paying in cash deposited to a shareholder's bank, dividends can also be paid through the issuance of additional shares or by what they call "share repurchase". In a few instances, dividends are given by assets.
If a company announced that a dividend of $0.70 per share will be distributed to shareholders, if you own 70 shares of that company, you will receive a total dividend amount of $49.
Take note: Not all corporations pay dividends to their shareholders.
Yes. eToro pays dividends.
Here are the instances when you can be paid with a dividend in eToro.
You will be debited or credited if you engage in trading stocks, ETF or an index distributes a dividend.
Keep in mind:
Dividend payments are taxable in some countries. Tax rate depends on the tax laws of the country the trader is residing.
If you're already convinced about trading with eToro and wondering where to begin then the very first step is to open an account. To make things easier, you just need to click on the button to get started.
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
eToro base the dividends it pays on the positions you hold in Dividend Stocks and Dividend ETFs.
On CFDs, if you hold a CFD position, eToro will pay you a dividend on the Date of Record (ex-dividend date) that will appear in your current balance.
On real assets, in order to receive a dividend, you must hold a position prior to the closing of the market at least two days before the Date of Record (ex-dividend date).
eToro pay out its users with dividends overnight. Dividend payments are calculated by eToro as refunds and then quickly added to the amount reflected in your profits.
In case of outstanding eToro fees stemming from your holding of a particular stock, the dividend payment will subtract to the accumulated fees.
eToro is a unique trading broker platform because it offers dividends on CFD trading unlike other brokers.
There are three big opportunities to use your dividends when trading on CFD (Contracts for Difference) on eToro.
eToro Copy Dividends allow users to also reap benefits from the profits of the traders they are copying without having to close the relationship first.
When the trader you are copying on eToro's pioneering Copy Trading feature withdraws an amount from their funds, a proportionate sum will be debited from your copy allocation and directed back to your account balance. That amount is referred to as the Copy Dividend.
Trader A has $5,000 in his account. You as a user who is copying Trader A, allocate $500 to this trader and after some time, Trader A makes a profit of $1,000. Trader A then decides to withdraw the profit, the proportional amount for you would be $100, which will be deducted from your copy allocation and directed back to your account balance. This way, you too can earn a profit without having to wait for the copy to close.
Another feature of eToro Copy Dividends is that when Trader X deposits additional fund to his/her account, you will be notified of this activity, so you can decide whether you would also want to add to your copy allocation.
When a user engages in CFD trading on eToro, they also get an opportunity to cash out on dividends.
Despite not actually buying a share of a company in CFD trading, eToro collates all positions into one single position and buys the equivalent shares in actual stock market environment. This makes it possible for eToro to get dividend payments from any listed company that shell out dividend payments.
eToro then uses this dividend payments to pay off eToro users with their own proportioned profits.
If 200 eToro users engages on (Company A) CFDs, and totaling all the positions, the exposure equals to 600 shares. eToro will then deal with the stock market where Company A is listed to actually purchase 600 shares to hold and include in its portfolio, to cash out any dividend amount.
Yes. It is possible to live well off dividend payments. This naturally happens when a trader started investing early and has invested on several profitable high-yielding stocks whose total dividends will be enough to cover the standard of living in the user's country of residence.
There are no proven and exact technique on how to earn regularly off eToro dividends. However, several successful traders offer these following best trading practices advises:
To see your dividend earnings on eToro, simply follow these steps:
The DividendGrowth CopyPortfolio is an investment strategy guide created by eToro as a ready-made solution for investors in search of dividend-rich companies to invest on.
We believe that investing should be made as easy as possible for people. Ask any asset manager and they will say investing in dividend-paying stocks is one way to mitigate the downside of a volatile market.
This portfolio grouped together a number of companies using the following criteria:
The result is a pool of dividend-strong companies that may appeal to dividend-seeking eToro traders. Among the companies usually included in the DividendGrowth portfolio are: McDonald's, IBM, Coca-Cola and 3M.
To simply follow the DividendGrowth Portfolio, just add it to your watchlist.
Now that you have all the information that you need, you're probably more interested now about trading with eToro and wondering where to begin. The first step is to open an account and to make things easier, you just need to click on the button to get started.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.