The company issues dividends, and short sellers still have to pay?
@MEXC has arranged dividend settlements for Stock Futures like Coca-Cola KO this time: at settlement, longs receive adjustment payments, shorts pay money, recorded under special funding fees.
Why? To simplify, take an example: a stock priced at $100 with a $1 dividend per share. All else equal, the theoretical price after ex-dividend is $99.
If the contract also drops by $1, shorts have unrealized gains on paper. But since this part comes from the dividend, it can’t be directly counted as profit from shorting, so the dividend adjustment must be accounted for. The same applies to longs, who receive adjustment payments but must also consider the price drop.
Seeing “dividend” and thinking to go long to collect money, or to short early expecting a drop, often leads to missing this calculation.
Some Stock Futures’ Zero Fee waives trading fees, but dividend adjustments are charged separately; specific applicable contracts, regions, and accounts depend on the latest fee schedule.
Especially with leverage, short deductions and long positions facing ex-dividend price drops can affect margin. It’s still worth reading such announcements.
#MEXC0808
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