Stock CFDs

Stock CFDs

Contracts for Difference (CFDs) on stocks allow traders to gain exposure to the price movements of individual company shares without actually owning the underlying asset. Stock CFDs have become one of the most popular instruments for retail and institutional traders alike, offering the flexibility to trade on margin, go long or short, and access a wide range of global equity markets from a single platform.

One of the key features that distinguishes stock CFDs from direct share ownership is the treatment of dividends. When you hold a traditional share, you are entitled to receive dividends paid by the company. However, since CFD holders do not own the actual shares, dividend adjustments are applied to CFD positions to reflect the economic effect of dividend payments on the underlying stock.

Dividend Adjustments

When a company pays a dividend, the value of its shares typically drops by approximately the amount of the dividend on the ex-dividend date. In CFD trading, this adjustment is reflected in the client's account to ensure fair and accurate pricing. For long CFD positions, the dividend amount is credited to the trader's account, simulating the dividend income that a shareholder would receive. For short CFD positions, the dividend amount is debited from the trader's account, as the trader would be responsible for paying the dividend to the lender of the shares.

These adjustments are applied automatically by Exxon Assets's trading platform on the ex-dividend date, ensuring that clients do not need to manually calculate or account for dividend events. The precise timing and methodology of these adjustments follow industry-standard conventions and are fully transparent in our trading reports.

US Section 871(m) Tax Regulation

Clients trading US stock CFDs should be aware of the United States Internal Revenue Code Section 871(m), which imposes a withholding tax on certain derivative payments connected to US-source dividends. Under this regulation,.delta-one" instruments, including stock CFDs that reference US equities, may be subject to a 30% withholding tax on the dividend adjustment amount. Exxon Assets handles this withholding in compliance with applicable tax regulations, and the adjusted amounts are reflected in client statements. Clients are encouraged to consult with their tax advisors regarding the implications of Section 871(m) on their trading activities.

Turbo Stocks

Turbo Stocks are a specialized type of leveraged CFD product offered by Exxon Assets that provide enhanced exposure to individual stock price movements. Designed for traders seeking amplified returns within a defined risk framework, Turbo Stocks combine the simplicity of stock CFDs with the power of leverage. Each Turbo Stock product has a defined strike price and barrier level, providing a built-in risk management mechanism that limits potential losses to the initial investment while offering significant upside potential.

Margin Requirements

Trading stock CFDs on margin allows traders to open positions that are significantly larger than their account balance. The margin requirement represents the percentage of the total trade value that must be held in the trading account as collateral. Margin levels vary depending on the specific stock, market conditions, and the trader's account type.

Exxon Assets provides competitive margin rates across its full range of stock CFD products, with dynamic margin adjustments that reflect real-time market conditions. Our platform displays real-time margin requirements for each instrument, ensuring that traders always have clear visibility into their capital requirements and exposure levels.