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When short selling a CFD directly on an exchange (ie. Direct Market Access CFDs), you will be affected by the rules for the stock market in that country. For example:
- For Australian CFDs, you may experience limitations on the amount of CFDs you can short trade in a single day due to limited borrowing availability in the underlying market.
When short selling CFDs, you can experience forced closure of a position if your CFDs get recalled. The risk is particularly high if a stock becomes hard to borrow due to take overs, dividend, rights offerings or other merger and acquisition activities, or increased hedge fund selling of the stock for example.
CFDS SHORT-SELLING RESTRICTIONS
Due to market conditions, a number of financial authorities are announcing rule changes that affect short-selling of physical Stocks. These rule changes are put in place to protect the integrity and quality of the securities market and strengthen investor confidence. As a consequence, the changes will affect the short-selling of related CFDs.
It is the client’s responsibility to keep informed about what markets imply restrictions in short-selling. This can be done by contacting local authorities. List of CFDs available for short-selling is available under CFD Trading Conditions on Saxo trading platforms.
Dividends on CFD Positions
Holders of long CFD positions will, when dividends are paid on the underlying share, qualify for a proportional payout. Holders of short CFD positions will have to pay an amount equal to the full (gross) dividend paid on the underlying share.
All cash dividends for CFD positions are settled on pay date. Cash dividends are booked on ex-date to reflect the market price movement on the ex-date, but the actual value of the payment is settled on pay date.
Dividends on CFD positions are cash adjustments paid or debited by Saxo Cpital Markets and not by the underlying company. Dividends paid on CFDs are not eligible for any preferential withholding tax rates sometimes associated with dividends paid on physical stocks and may therefore differ from the dividends payable on the underlying share.
Each booking will be issued a reference number for the related positions. You can find each booking in the Activity Log in the Account Menu in SaxoTrader 2 and in WebConnect.
Dividends on Index Trackers
When any underlying stock that is part of an Index CFD goes ex-dividend the Index CFD will be price adjusted to reflect this dividend. The weighted proportion of the applicable dividend within the Index will be credited to the Clients account for long positions and debited for short.
Please note that the DAX30 is a Total Return Index, meaning that the index is automatically adjusted for dividends.
Index Dividend = Share Dividend * Shares in index / Index Divisor*.
* Divisor: an amount used to stabilize the index value when its composition changes. The sum of all index members' prices is divided by the divisor to achieve the normalized index value. The divisor is adjusted when capitalization amendments are made to the index members, allowing the index value to remain comparable at all times. To prevent the value of an index from changing due to such an event, all corporate actions that affect the market capitalization of the index require a divisor adjustment to ensure that the index values remain constant immediately before and after the event.
Partial Fills
Partial fills may occur on limit orders and the remaining amount stays in the market as a limit order and may be filled within the order duration.
Market orders can be filled at numerous levels, the price paid will be the volume weighted average price of all the fills.
Market Orders
Certain exchanges do not support market orders. If a client places a market order in these markets, Saxo Capital Markets will automatically convert the order to an aggressive limit order within a certain percentage limit “in the money”. The Percentage limit varies between 1% and 4% depending on the exchange and the type of instrument. Please note that it is a client’s responsibility to check if the order is filled in the market after order entry. If clients experience or suspect any errors with their order, they should contact Saxo Capital Markets immediately.
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| American Stock Exchange (AMEX) |
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| Australian Stock Exchange (ASX) |
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| Athens Stock Exchange (AT) |
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| London Stock Exchange (LSE_SETS) |
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| Oslo Stock Exchange (OSE) |
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| OMX Copenhagen (CSE) |
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| OMX Helsinki (HSE) |
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| OMX Stockholm (SSE) |
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| Singapore Exchange (SGX-ST) |
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In addition, some of our execution brokers may choose to convert market orders on certain exchanges into aggressive limit orders 3% “in the money”. This is due to their internal compliance and is intended to protect clients from unintentionally moving the market. Saxo Capital Markets will not be responsible for missing fills due to this.
Pre-Opening Order Fills in US Markets
In US markets, Saxo Capital Markets consolidates liquidity from a number of sources in addition to the primary exchanges. When there is a delay in the opening of the primary exchange, orders can be filled from these other sources before trading commences on the primary exchange.
Nordic Markets
Orders traded in the Nordic markets (Denmark, Sweden and Norway) are split into an "Even lot" which will be traded, and a remainder which will be routed to the odd-lot book.
When part of an order is routed to the odd-lot book, limit orders will be filled if possible or left on the book until a fill is possible. A market order will be filled immediately if possible, and will otherwise be cancelled (fill or kill principle).
Warsaw Stock Exchange
Broker’s market orders may be submitted to the exchange only during the continuous trading phase, except when balancing occurs. For any such order to be accepted, at least one opposite limit order must be awaiting execution.
A broker’s market order shall be executed at the price of the best opposite buy or, as the case may be, sell order awaiting execution.
Where any market order is partly executed, the unexecuted portion shall become a limit order at the last price.
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