When a stock, ETF, or other underlying asset tracked by a traditional financial asset contract pays a cash dividend, Gate performs an additional funding fee settlement. Under this mechanism, long position holders receive the corresponding dividend amount, while short position holders pay the corresponding amount.
Please note that traditional financial asset contracts are derivatives. Holding such a contract does not represent ownership of the corresponding stock, ETF, or other underlying asset, nor does it grant any shareholder rights, including voting rights or entitlement to dividends. The dividend settlement described in this article is a contract-level settlement mechanism, not a direct dividend payment from the relevant issuer to users.
1. How Are Dividends Settled?
Gate will perform an additional dividend settlement for applicable traditional financial asset contracts at a designated time, based on the cash dividend information of the relevant underlying asset.
The settlement will be processed according to the user’s position direction:
Position Direction | Settlement |
|---|---|
Long position | Receives the dividend amount |
Short position | Pays the dividend amount |
No position | Not included in the settlement |
If the same account holds both long and short positions in the same contract, the dividend amount will be calculated based on the net position after offsetting the long and short positions. If the net position is zero, the account will not participate in the dividend settlement.
Only users with an open position at the time of settlement will participate. The applicable contracts and settlement times are subject to the information published by Gate.
2. How Is the Dividend Settlement Amount Calculated?
The dividend settlement amount is calculated based on the dividend per share, the user’s position size, and the contract multiplier:
Dividend Settlement Amount = Position Size × Contract Multiplier × Dividend per Share
Where:
Position Size: The number of relevant contracts held by the user at the time of settlement;
Contract Multiplier: The number of shares represented by each contract;
Dividend per Share: The cash dividend per share announced by the stock issuer.
Gate uses the existing funding fee settlement process to complete the dividend settlement. The dividend per share is converted into a one-time special dividend funding rate as follows:
Dividend Funding Rate = − Dividend per Share ÷ Mark Price at Settlement
A negative dividend funding rate means that short position holders pay the corresponding amount to long position holders.
The dividend funding rate is used solely for the dividend settlement. It is not a regular funding rate and does not indicate any change to the contract’s regular funding rate.
3. Calculation Example
Assume that a stock pays a cash dividend of 0.5 USDT per share, the mark price at the time of settlement is 200 USDT, and the contract multiplier is 1.
User A holds 10 long contracts:
Position Value = 200 × 10 × 1 = 2,000 USDT
Dividend Funding Rate = −0.5 ÷ 200 = −0.25%
Dividend Settlement Amount = 10 × 1 × 0.5 = 5 USDT
After settlement, User A will receive 5 USDT.
A user holding the same number of short contracts will be required to pay a dividend settlement amount of 5 USDT.
4. What Is the Difference Between Dividend Settlement and Regular Funding Fees?
Dividend settlement does not replace regular funding fee settlement. They are separate settlement mechanisms:
Type | Purpose |
|---|---|
Regular Funding Fee | Settled periodically based on factors such as the contract’s premium or discount and market conditions, helping keep the contract price aligned with the index price |
Dividend Settlement | Applied when the relevant underlying asset pays a cash dividend. Long position holders receive the corresponding amount, while short position holders pay it |
If the dividend settlement time coincides with a regular funding fee settlement, Gate will first settle the regular funding fee and then perform the additional dividend settlement.
Dividend settlement records will be displayed separately from regular funding fee records. Please refer to the relevant page for the actual record details.
5. Important Notes
Dividend settlement is a contract-level value adjustment mechanism. It does not mean that users directly hold the relevant stock or have any actual shareholder rights.
Short position holders are required to pay the dividend settlement amount. The deduction may affect the account balance and margin ratio. Please ensure that your account has sufficient available balance and margin before settlement.
The relevant underlying asset will typically undergo a price adjustment after the ex-dividend date. Therefore, receiving a dividend settlement amount does not necessarily result in additional returns. The contract’s index price, mark price, and market price may also change accordingly.
The dividend per share, settlement time, and other relevant information are subject to the final information published by the issuer, the relevant exchanges, and Gate. If a dividend plan is canceled or modified, or if other special circumstances arise, Gate reserves the right to adjust or cancel the corresponding dividend settlement.
Disclaimer
The content provided herein is for reference and educational purposes only and does not constitute any financial, investment, trading, or legal advice, nor does it constitute an offer or solicitation to buy or sell any digital assets. Gate makes no express or implied representations or warranties regarding the accuracy, completeness, or timeliness of the information contained herein. Product features, interfaces, rules, and fee structures may be updated or adjusted at any time. Please refer to the latest announcements and the actual information displayed on the Gate platform for the most accurate details.
Digital asset investments involve significant risk, and prices may fluctuate substantially. You may lose the entire amount of your investment. Please make decisions cautiously based on your own financial situation and risk tolerance after fully understanding the associated risks. If necessary, you are advised to consult an independent professional financial or legal advisor.
For more information about potential risks, please refer to Gate's Risk Disclosure and User Agreement.
