Traditional financial asset contracts are derivatives. Holding these contracts does not mean you actually own the corresponding stocks, ETF shares, or other underlying assets, nor does it grant you rights such as shareholder or fund unitholder voting rights or direct dividend rights.
When the relevant underlying pays a cash dividend or distribution, its price may change due to the ex-dividend adjustment. Based on the underlying and applicable contract rules, Gate may make contract-level dividend adjustments through methods such as an additional funding fee settlement to reflect the impact of the ex-dividend adjustment on the economic value of long and short positions. The “dividend distribution” referred to in this article means this type of contract settlement arrangement. It does not mean that the relevant issuer directly distributes dividends to contract users, nor does it guarantee that users will receive the same returns as if they actually held the underlying asset.
An underlying asset paying a dividend or distribution does not necessarily mean that the corresponding contract will undergo a dividend adjustment. Whether an adjustment will be made, the applicable contracts, adjustment amount, settlement time, and other arrangements are subject to Gate's relevant dividend distribution announcements. The following describes the general settlement method where applicable.
I. How Are Dividend Distributions Settled?
For contracts for which dividend adjustments have been announced, Gate will settle dividend distributions at the specified time according to the announcement.
At settlement, the system processes positions based on the user's position direction:
Position Direction | Treatment |
Long Position | Receives the dividend distribution |
Short Position | Pays the dividend distribution |
No Position | Does not participate in settlement |
If the same account simultaneously holds long and short positions in the same contract market, the system calculates settlement based on the net position after offsetting the long and short positions. If the net position is 0, it will not participate in this dividend distribution settlement.
Only users who still hold the relevant positions at the time of dividend distribution settlement will participate in settlement. Applicable contracts and settlement times are subject to information published by Gate.
II. How Is the Dividend Distribution Amount Calculated?
The dividend distribution amount is calculated based on the dividend amount per share, the user's position quantity, and the contract multiplier:
Dividend Distribution Amount = Net Position Quantity × Contract Multiplier × Per-Unit Dividend Adjustment Amount
Where:
Net Position Quantity: The quantity remaining after offsetting long and short positions held by the same account in the same contract market at the time of settlement;
Contract Multiplier: The number of contract units represented by each contract;
Per-Unit Dividend Adjustment Amount: The per-share or per-unit adjustment amount used for this dividend distribution, as determined by Gate based on the relevant distribution information. The specific amount is subject to the relevant announcement.
To complete dividend distribution settlement, Gate converts the per-unit dividend adjustment amount into a special dividend funding rate:
Dividend Funding Rate = − Per-Unit Dividend Adjustment Amount ÷ Mark Price at the Time of Settlement
A negative dividend funding rate means that short positions pay and long positions receive in this settlement.
The dividend funding rate is used only to complete dividend distribution settlement by reusing the funding fee settlement method. It remains a dividend distribution settlement by nature, not a regular funding fee, and does not indicate a change to the contract's regular funding rate.
III. Calculation Example
Assume that a stock pays a cash dividend of 0.5 USDT per share. That is, the per-unit dividend adjustment amount for this settlement is 0.5 USDT, the mark price at the time of dividend distribution settlement is 200 USDT, and the contract multiplier is 1.
User A holds 10 long contracts. Therefore:
Net Position Value = 200 × 10 × 1 = 2,000 USDT
Dividend Funding Rate = −0.5 ÷ 200 = −0.25%
Dividend Distribution Amount = 10 × 1 × 0.5 = 5 USDT
After settlement is completed, User A will receive a dividend distribution of 5 USDT.
If the user holds the same number of short contracts, they will need to pay a dividend distribution of 5 USDT.
IV. What Is the Difference Between Dividend Distributions and Regular Funding Fees?
Dividend distribution settlement does not replace regular funding fee settlement. They are different types of settlement:
Type | Purpose |
Regular Funding Fee | Settled periodically based on contract market premiums, discounts, and long/short market conditions to help narrow the gap between the contract price and index price |
Dividend Distribution | Implemented according to the relevant announcement to reflect the impact of the underlying's ex-dividend adjustment on contract positions and prices. Long positions receive, while short positions pay, the corresponding dividend distribution amount. |
If the dividend distribution settlement time coincides with the regular funding fee settlement time, the system will first complete the regular funding fee settlement according to the existing rules, then additionally execute the dividend distribution settlement.
Relevant settlement records will be displayed separately from regular funding fee records. Please refer to the actual page display.
V. Important Notes
Dividend distributions are a contract-level value adjustment mechanism. They do not mean that users directly hold the relevant stocks or are entitled to actual shareholder dividend rights.
For contracts subject to dividend adjustments, net short positions must pay the corresponding adjustment amount. Such deductions may affect your account balance and margin ratio. Please ensure that your account has sufficient available balance and margin before settlement.
The relevant underlying will typically undergo a price adjustment after going ex-dividend. Therefore, receiving a dividend distribution does not necessarily mean that users will earn additional profits. The contract index price, mark price, and market price may also change accordingly.
Distribution policies, disclosure timing, and methods for confirming amounts may differ across markets and underlying assets. For ETF underlyings, distribution amounts may also be affected by factors such as portfolio income, fees, and fund distribution arrangements. Although some ETFs have announced estimated distribution schedules, the specific amount may not be announced or confirmed until close to the ex-dividend date, and estimated information may also change. Therefore, historical distribution amounts, estimated distribution schedules, or third-party estimate data should not be regarded as a definitive basis for the current dividend adjustment of the corresponding contract. Gate will determine whether to implement dividend adjustments and the specific handling method based on the underlying's distribution characteristics, available information, data reliability, and contract operating conditions. Relevant arrangements are subject to Gate announcements. Similar circumstances may also arise for other underlying assets. Please pay attention to relevant announcements.
Information published by the underlying issuer and relevant markets serves as a reference for the platform's assessment of dividend adjustment arrangements, while the specific handling of contract dividend distributions is subject to Gate's relevant announcements. If a dividend distribution is changed or canceled, or in special circumstances such as information delays or data anomalies, Gate may adjust, postpone, or cancel the relevant settlement based on actual conditions and explain the applicable arrangements through an announcement. If amounts are subsequently corrected or adjusted, the applicable scope, position eligibility criteria, and handling method are subject to the corresponding announcement.
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.
