Implied dividend
Definition · Level 10 · Derivatives pricing
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Dividend level backed out of futures or put-call parity quotes — what the market is pricing, which can differ from analyst forecasts.
Example
SX5E 5,000, 1-year future 4,950, 2% rate → about 150 points of dividends priced.
Where Tradecraft teaches it
Level 10 · Derivatives pricing, in the lesson “Forwards & futures: pricing by carry”: Price equity, FX and commodity forwards from the cost of carry, and know when futures differ.
Related terms
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- Forward pricePrice fixed today for delivery at a later date, set by what it costs to buy and hold the asset until then — not a forecast.
- Futures convexity adjustmentGap between a futures price and the matching forward caused by daily margining when the underlying moves with rates.
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