With the market as it, many of you have decided to include shorting in your investment strategy. It’s quite possible that one of the companies that you shorted was one that pays a cash dividend. Since you are likely borrowing the shares that you initially sold to create your short position, you are required to reimburse the lender of the stock for the dividends that he missed. Your broker probably notified you of that fact, and reduced your cash position in your account by the amount of the dividend.

Just follow the step-by-step wizard to make your Dividend Paid on Short Sales

With such a function, Trademax make it easy to better adjust the cost basis of the stock by that amount.

  1. Select the record to which you want to make your Div Paid on ShortSales.l

  2. Right-click the selected record and select the Event Append in the context menu, then choose Div paid on ShortSales in the dropdown list:

  3. A dialog box will pop up:

    4. Function
    Description
    1. Enter Transaction

    There are two options in the dropdown list:  Return of Capital and Div Paid on ShortSales. The default type depends on your choice in previous step.
    2.Transaction Date The payment date when the company expects the divideng payment process to complete. You can manually enter the date or choose from the dropdown calendar to set the Transaction Date.
    3. Event Date The record date when the company initiates the dividend payments to shareholders of record. You can manually enter the date or choose from the dropdown calendar to set the Event Date.
    4.Account The account name to which the specific security belongs. Choose the specific account name from the account list.
    5.Security Name The name of the specific security
    6.Amount Manually enter the quantity of the capital
    7.Notes
    The description of the security is displayed automatically
  4. After checking the information, press OK to continue the process. You will see the following grid:

    5. As you see from the picture, the new record is generated automatically.

  5. You can cancel this action with the Undo Button in the trade tab.

Supplemental Instruction : Let’s say you short 1000 shares of ABC Company on March. 1 at $10 a share. On Mar. 16, your broker notifies you that your account will be reduced by $50 for the dividend paid by ABC Company to its shareholders. On April 10, you close your short position by buying 1000 shares of ABC at $8 a share. Since the short position was not open for at least 46 days, you cannot use the $50 in-lieu-of-dividend payment as a current expense. Rather, this $50 is added to the price of the stock that you purchased to close the position. In the example above, your net gain on your short position would be $150 ($1,0000-($8000+$50)=$150).