Dividends are a portion of a company's profits distributed to its shareholders. The more shares a shareholder owns, the more dividends they will receive.

To be eligible for dividend payments, you must purchase shares before the ex-dividend date (the date when the list of eligible dividend recipients is determined). You can find this date for the specific stock on the Instrument Specification page.

Let's use IBM's stock as an example, specifically its shares with the ex-dividend date 9 November 2021. If you wanted to receive dividends, you needed to purchase your shares prior to the end of main trading session on 8 November 2021 and hold them until the next day (9 November 2021). If you had done that, you would have received dividends even if you had sold the shares on 9 November 2021.

Dividends are paid out according to the following formula:

When dividend amounts are less than 1 cent ($0.001), they are rounded to the nearest whole cent. For example, $0.007 is rounded up to $0.01, while $0.003 is rounded down to 0. As such, the amount of dividends paid would be zero. Please bear this in mind when selecting your investment volume.

The tax due on US dividends is 30%.

Dividends may be credited up to several days after the relevant ex-date, but typically they're paid on the ex-date itself.

You can find more information about ex-dividend dates in the 'Information' tab below each instrument's chart.