I trade the big ones with the same principle in mind. However a little different and true short term approach for a DT on them. I will use anz as an example as its the best example from the past few months. My approach, is around shorting them the day prior to the divi announcement, if I feel the overall market sentiment that week is bearish in general.
Here's the eg. Anz went ex div on 7 November. 91c divi ps. I short at close on 6 November for 33.83. Closes around 33.80 after market Opens following day as ex div at 32.60. Already below as sentiment down, plus a lot of fundies set their trades up for auto stops the day prior and get the peak cap gain Low of day is 32.29. Closes 32.38. I got out around 32.45 (nerves).
So summary trade, is you pay the divi at open of 91c on 5000 units, that's $4500. You follow closely above the gain scenario of 1.38 x 5000 units. Profit for the DT is decent
. Strategy only normally works as a DT not a hold. And when sentiment isn't good the day prior...... . Set your limit for stop at the same as divi value, so worst case you are exited with a net zero position less your fees. In this case for me it was a few hundred but strategy worked.
Didn't do it on cba. Did on nab. Will do further in next few weeks on some top end blue chips, pending above rules and if the run up gains are decent. Check origin energy if you want a small low risk one if you feel up to trying. From memory ex div date is 28 feb and you can see constant acquisition in the 6 weeks lead up. If sentiment is down Thursday I will do this at close again.
Good luck with your CFD plays. Keep tight stops too. Every time I haven't it normally comes back to bite me!
