If I buy a stock with 5x leverage, do I also get 5x more dividend?
Asked 4 years ago
I'm a beginner looking to build some passive income, and dividend stocks seem appealing to me. I'd like to know if I buy Merck with 5X leverage, will I get 5x more in dividends? Would appreciate any answers. Thanks
Osasere Okunloye
Tuesday, June 22, 2021
Ideally, You should get as much dividend. Generally, as long as factors like market sentiment, market information etc. are kept equal, the share price should fall or rise at the same amount. However, because EToro will help you hold your CFD, you will have to pay for their services. Hence, you may not get the exact amount.
Andia Rispah Igobwa
Thursday, August 05, 2021
If you buy stocks with 5x leverage, then yes- the dividends will also be 5x.
5X leverage means that for every $100 of equity in your account, you have a potential risk of $500. That means a large part of your income could come from dividends and interest earned on that money (although it is also possible to make losses), which is why one should only do this under certain circumstances and not speculate thereon.
Investors should be careful with all such investments, especially when they have multiple sources of funds and can afford to lose more than their initial investment or are unwise about the dangers involved.
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