Consider including some investing resolutions as part of your plan for 2023! You should consider the share price movement before selling a share with an ex-dividend. Russell Gold considers himself as both a contrarian and dividend growth investor. New comments cannot be posted and votes cannot be cast, EX hours (under leave balances) listed on pay stub, Ex Div Dates / Payment Dates / Sell Dates, EX Job Progression Materials and Levels Breakdown, Ex employer not paying SSP on payslip(UK), Major banks forecasting a recession in earnings calls, DoorDash COO selling more than 47 thousand of his shares. That means they can sell their shares on the ex-dividend date and still receive the dividend. Traders must also consider that it is common for a stock's underlying price to decrease on or before the ex-dividend date by an amount approximately equal to the dividend. Apple declared a $0.73 per share dividend on January 29 th 2019 with an ex-dividend date of February 8 th, 10 days away and a payment on the 14 th of February. ._3K2ydhts9_ES4s9UpcXqBi{display:block;padding:0 16px;width:100%} However, investors who buy shares on the ex-dividend date will not receive the payment. If you buy them . Ex-Dividend Price Effects. As mentioned above, this date will typically be two days before the record date. An unpaid dividend is a dividend that is due to be paid to shareholders but has not yet been distributed. Others like to sell the day before ex-date (the last possible day where the buyer of the shares will still be "paying for" the upcoming dividend) with the idea to try and maximize capital gain. Assume, for example, that the record date is Monday, Feb. 10. Any new investors buying shares on or after that date would not receive dividends. Read More: The Lowdown on Using Forex Apps for Beginners. If you hold a CFD position you will not receive dividends as such. If you buy the stock on or after ex-dividend you dont get the dividend. The ex-dividend date for stocks is usually set one business day beforethe record date. If you buy on or after the ex-dividend-date in regular trading, after hours trading or premarket trading, you do not qualify for the dividend. Before sharing sensitive information, make sure youre on a federal government site. The ex-dividend date defines the last day when a buyer can buy a dividend-paying stock and receive the upcoming dividend. Essentially, the investor would likely break even . Those who buy simply to capture the dividend can then sell in either the premarket or during regular trading on the ex-dividend date. Jason Fernando is a professional investor and writer who enjoys tackling and communicating complex business and financial problems. Someone with 100 shares had a value of $2,500 the day before and on the ex-dividend date shares worth $2,400 plus a . These shareholders are the ones entitled to the dividend. If you sold shares before the ex-dividend date no matter if in pre-market trading, regular trading or after-hours trading, you will not qualify for the dividend. That means they can sell their shares on the ex-dividend date and still receive the dividend. ._2cHgYGbfV9EZMSThqLt2tx{margin-bottom:16px;border-radius:4px}._3Q7WCNdCi77r0_CKPoDSFY{width:75%;height:24px}._2wgLWvNKnhoJX3DUVT_3F-,._3Q7WCNdCi77r0_CKPoDSFY{background:var(--newCommunityTheme-field);background-size:200%;margin-bottom:16px;border-radius:4px}._2wgLWvNKnhoJX3DUVT_3F-{width:100%;height:46px} This reflects the decrease in the company's assets resulting from the declaration of the dividend. But because you didn't hold the stock for 61 days, you'll pay taxes at your ordinary tax rate. 06/04/2023. Therefore, if you absolutely must sell the stock on the ex-dividend date and recoup the cash, place a realistic order. The procedures for stock dividends may be different from cash dividends. Last year's total dividend payments show that JDE Peet's has a trailing yield of 2.5% on the current share price of 27.54. ._2ik4YxCeEmPotQkDrf9tT5{width:100%}._1DR1r7cWVoK2RVj_pKKyPF,._2ik4YxCeEmPotQkDrf9tT5{display:-ms-flexbox;display:flex;-ms-flex-align:center;align-items:center}._1DR1r7cWVoK2RVj_pKKyPF{-ms-flex-pack:center;justify-content:center;max-width:100%}._1CVe5UNoFFPNZQdcj1E7qb{-ms-flex-negative:0;flex-shrink:0;margin-right:4px}._2UOVKq8AASb4UjcU1wrCil{height:28px;width:28px;margin-top:6px}.FB0XngPKpgt3Ui354TbYQ{display:-ms-flexbox;display:flex;-ms-flex-align:start;align-items:flex-start;-ms-flex-direction:column;flex-direction:column;margin-left:8px;min-width:0}._3tIyrJzJQoNhuwDSYG5PGy{display:-ms-flexbox;display:flex;-ms-flex-align:center;align-items:center;width:100%}.TIveY2GD5UQpMI7hBO69I{font-size:12px;font-weight:500;line-height:16px;color:var(--newRedditTheme-titleText);white-space:nowrap;overflow:hidden;text-overflow:ellipsis}.e9ybGKB-qvCqbOOAHfFpF{display:-ms-flexbox;display:flex;-ms-flex-align:center;align-items:center;width:100%;max-width:100%;margin-top:2px}.y3jF8D--GYQUXbjpSOL5.y3jF8D--GYQUXbjpSOL5{font-weight:400;box-sizing:border-box}._28u73JpPTG4y_Vu5Qute7n{margin-left:4px} The ex-dividend date is important because it determines whether the buyer of a stock will be entitled to receive its upcoming dividend. "Topic No. In an efficient market, the stock price would already reflect the announced news. Importance, Usages, and Calculation, Dividend Discount Models: All You Need to Know, Dividend Valuation Models: All You Need to Know, What is a Secured Loan? We have three key dates regarding dividends. To receive a dividend, investors must hold the stock at the opening of the market on the ex-dividend date. Check out the close on day one and open for day 2 and you'll find that world events came into play to help determine the days open. /*# sourceMappingURL=https://www.redditstatic.com/desktop2x/chunkCSS/TopicLinksContainer.3b33fc17a17cec1345d4_.css.map*/I'd feel confident with $12-15. Another area of confusion about ex-dividend dates is how pre-market and after-hour trading influences dividends. Due to the two-day settlement rule, a stock goes ex-dividend one business day before the record date. Test your knowledge of Ponzi schemes, CUSIP numbers, blue sky laws, and more! Usually, established companies that pay consistent dividends, follow a dividend calendar. Instead, the seller gets the dividend. A shareholder with 1000 ABC shares would receive $500. Outcome A: In 12 cases buying one day before the ex-dividend date (option: "ex-dividend day -1") would have earned the best total returns. Sell on this day, and you will still receive the dividend. Any stockholders buying stocks on or after the ex-dividend date do not qualify for the dividends. Answer (1 of 10): Yes. U.S. Securities and Exchange Commission. A dividend is a distribution of a portion of a company's earningspaid to a class of its shareholders in the form of cash, shares of stock, or other property. Ex-Dividend Date - once the record date is set the stock market will automatically set the ex-dividend date. (Alternative, Advantages, And Disadvantages), What is Scrip Dividend? The offers that appear in this table are from partnerships from which Investopedia receives compensation. .LalRrQILNjt65y-p-QlWH{fill:var(--newRedditTheme-actionIcon);height:18px;width:18px}.LalRrQILNjt65y-p-QlWH rect{stroke:var(--newRedditTheme-metaText)}._3J2-xIxxxP9ISzeLWCOUVc{height:18px}.FyLpt0kIWG1bTDWZ8HIL1{margin-top:4px}._2ntJEAiwKXBGvxrJiqxx_2,._1SqBC7PQ5dMOdF0MhPIkA8{vertical-align:middle}._1SqBC7PQ5dMOdF0MhPIkA8{-ms-flex-align:center;align-items:center;display:-ms-inline-flexbox;display:inline-flex;-ms-flex-direction:row;flex-direction:row;-ms-flex-pack:center;justify-content:center} What are advisory firms, and how do they earn money? Get in Touch. In . If only a dividend record date is available, simply go back two business days from the record date to find the ex-dividend date. ._3oeM4kc-2-4z-A0RTQLg0I{display:-ms-flexbox;display:flex;-ms-flex-pack:justify;justify-content:space-between} Ex-dividend and record dates are set closely. Dividends are paid out quarterly, semiannually, or annually. All shareholders of the company before the ex-dividend date would be entitled to the dividend payment. A dividend rollover plan is an investment strategy in which the investor purchases a dividend-paying stock shortly before its ex-dividend date. Figured it was going to happen. Typically you will receive a 100% credit on long positions and a 100% debit on short positions of the net dividend value. If I have my share of stock the day before an ex dividend date. To recap your dividend capture strategy: You paid $4,800 (plus commission) to purchase 200 shares of stock. Investors can use the Ex-Dividend Date Search tool to track stocks that are going ex-dividend during a specific date range. After the ex-date, a stock is said to trade ex . Dividend vs. Buyback: What's the Difference? The declaration date or "announcement date" is the day on which a company's board of directors announces its next dividend payment. "Thinking of Day Trading? Thus a trader who wishes to capture the dividend could sell his stock in premarket trading on the ex-dividend date, but would expect to receive a lower price for his shares by the . Press question mark to learn the rest of the keyboard shortcuts. For example, a stock that will pay a $1 dividend closes the day before the ex-dividend date at $25. If you are not on Apple record books on the date of record, you will not receive the dividend payment. The ex-dividend date is the date which is used to decide which shareholders will receive a dividend payment. Federal government websites often end in .gov or .mil. And it then hits the ex dividend date where Im eligible for the dividend a few days later, must I keep until 9:30 am the morning of ex dividend date or sell before 9:30 in pre market? Shareholders who bought the stock on the ex-dividend date or after will not receive a dividend. You don't get a dividend if you buy a stock that the day the dividend is paid. Thus, youll receive the dividend amount even if you sell the shares immediately.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[300,250],'cfajournal_org-large-mobile-banner-1','ezslot_6',149,'0','0'])};__ez_fad_position('div-gpt-ad-cfajournal_org-large-mobile-banner-1-0'); You should consider the share price movement before selling a share with an ex-dividend. But, for example, a $50 stock with a $1/qtr dividend will open on ex-div day at $49. In detail, Stag Industrial has raised its monthly dividend for common stock to $0.122500 per share, which amounts to an annual dividend of $1.47. Shareholders must be on the companys record lists on this date to receive dividends. If the shareholder sells a "cum . Place a sell order for your stock on the ex-dividend date. Step #2: Then, a company decides which shareholders will receive a dividend. The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. 05/05/2023. ._3-SW6hQX6gXK9G4FM74obr{display:inline-block;vertical-align:text-bottom;width:16px;height:16px;font-size:16px;line-height:16px} The dividend capture strategy involves buying a stock on or just before the ex-dividend date and then selling the stock after locking in the dividend payment. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. of Virginia Inc. (SONA). The ex-dividend date is the time when shareholders are quarantined for payment. ", Internal Revenue Service. Reviewed by Ryan Cockerham, CISI Capital Markets and Corporate Finance. Similarly, for companies paying a one-off dividend, it will still send a positive signal. Thereby, if a record date is set on 18th February, the ex-dividend date would be on 16th February. .Rd5g7JmL4Fdk-aZi1-U_V{transition:all .1s linear 0s}._2TMXtA984ePtHXMkOpHNQm{font-size:16px;font-weight:500;line-height:20px;margin-bottom:4px}.CneW1mCG4WJXxJbZl5tzH{border-top:1px solid var(--newRedditTheme-line);margin-top:16px;padding-top:16px}._11ARF4IQO4h3HeKPpPg0xb{transition:all .1s linear 0s;display:none;fill:var(--newCommunityTheme-button);height:16px;width:16px;vertical-align:middle;margin-bottom:2px;margin-left:4px;cursor:pointer}._1I3N-uBrbZH-ywcmCnwv_B:hover ._11ARF4IQO4h3HeKPpPg0xb{display:inline-block}._2IvhQwkgv_7K0Q3R0695Cs{border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._2IvhQwkgv_7K0Q3R0695Cs:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B{transition:all .1s linear 0s;border-radius:4px;border:1px solid var(--newCommunityTheme-line)}._1I3N-uBrbZH-ywcmCnwv_B:focus{outline:none}._1I3N-uBrbZH-ywcmCnwv_B.IeceazVNz_gGZfKXub0ak,._1I3N-uBrbZH-ywcmCnwv_B:hover{border:1px solid var(--newCommunityTheme-button)}._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk._35hmSCjPO8OEezK36eUXpk{margin-top:25px;left:-9px}._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:focus-within,._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP._3aEIeAgUy9VfJyRPljMNJP:hover{transition:all .1s linear 0s;border:none;padding:8px 8px 0}._25yWxLGH4C6j26OKFx8kD5{display:inline}._2YsVWIEj0doZMxreeY6iDG{font-size:12px;font-weight:400;line-height:16px;color:var(--newCommunityTheme-metaText);display:-ms-flexbox;display:flex;padding:4px 6px}._1hFCAcL4_gkyWN0KM96zgg{color:var(--newCommunityTheme-button);margin-right:8px;margin-left:auto;color:var(--newCommunityTheme-errorText)}._1hFCAcL4_gkyWN0KM96zgg,._1dF0IdghIrnqkJiUxfswxd{font-size:12px;font-weight:700;line-height:16px;cursor:pointer;-ms-flex-item-align:end;align-self:flex-end;-webkit-user-select:none;-ms-user-select:none;user-select:none}._1dF0IdghIrnqkJiUxfswxd{color:var(--newCommunityTheme-button)}._3VGrhUu842I3acqBMCoSAq{font-weight:700;color:#ff4500;text-transform:uppercase;margin-right:4px}._3VGrhUu842I3acqBMCoSAq,.edyFgPHILhf5OLH2vk-tk{font-size:12px;line-height:16px}.edyFgPHILhf5OLH2vk-tk{font-weight:400;-ms-flex-preferred-size:100%;flex-basis:100%;margin-bottom:4px;color:var(--newCommunityTheme-metaText)}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX{margin-top:6px}._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._19lMIGqzfTPVY3ssqTiZSX._3MAHaXXXXi9Xrmc_oMPTdP{margin-top:4px} It is a timing-oriented strategy used by an investor who buys a stock just before its ex-dividend or reinvestment date to capture the dividend. Ex-dividend dates are extremely important in dividend investing, because you must own a stock before its ex-dividend date in order to be eligible to receive its next dividend. Shares bought on or after the ex-dividend date will not qualify for the dividend. Read More: Is the Robinhood App Safe? The value of the stock drops on the ex-dividend date by the same amount as will be earned when the dividend is paid. Since record date is usually the day after ex date for stocks, you could theoretically sell on ex-div date and still get it because the sell trade wouldn't settle until after the record date (T+2) and you'd still show up as a shareholder on the record date. The largest delta to the "worst" option in these 12 cases . . Dividends are distributions of a portion of a company's earningspaid to shareholders. Some companies reinvest those retained earnings back into the company, while others may take a portion of retained earnings and pay it back to shareholders through dividends. Instead, the seller gets the dividend. ET to 8:00 p.m. Example 1: On . investors' eligibility for the dividend will be decided based on their holdings in the stock as of the said date. Why do stock prices decline right after the dividend is paid? If you hold the shares on an ex-dividend date, youll be listed on the record date as well. Phil. What the ex-dividend date means to you as an investor. Types, Advantages, and Disadvantages, What Is A Bank Guarantee? ._3Qx5bBCG_O8wVZee9J-KyJ{border-top:1px solid var(--newCommunityTheme-widgetColors-lineColor);margin-top:16px;padding-top:16px}._3Qx5bBCG_O8wVZee9J-KyJ ._2NbKFI9n3wPM76pgfAPEsN{margin:0;padding:0}._3Qx5bBCG_O8wVZee9J-KyJ ._2NbKFI9n3wPM76pgfAPEsN ._2btz68cXFBI3RWcfSNwbmJ{font-family:Noto Sans,Arial,sans-serif;font-size:14px;font-weight:400;line-height:21px;display:-ms-flexbox;display:flex;-ms-flex-pack:justify;justify-content:space-between;-ms-flex-align:center;align-items:center;margin:8px 0}._3Qx5bBCG_O8wVZee9J-KyJ ._2NbKFI9n3wPM76pgfAPEsN ._2btz68cXFBI3RWcfSNwbmJ.QgBK4ECuqpeR2umRjYcP2{opacity:.4}._3Qx5bBCG_O8wVZee9J-KyJ ._2NbKFI9n3wPM76pgfAPEsN ._2btz68cXFBI3RWcfSNwbmJ label{font-size:12px;font-weight:500;line-height:16px;display:-ms-flexbox;display:flex;-ms-flex-align:center;align-items:center}._3Qx5bBCG_O8wVZee9J-KyJ ._2NbKFI9n3wPM76pgfAPEsN ._2btz68cXFBI3RWcfSNwbmJ label svg{fill:currentColor;height:20px;margin-right:4px;width:20px;-ms-flex:0 0 auto;flex:0 0 auto}._3Qx5bBCG_O8wVZee9J-KyJ ._4OtOUaGIjjp2cNJMUxme_{-ms-flex-pack:justify;justify-content:space-between}._3Qx5bBCG_O8wVZee9J-KyJ ._4OtOUaGIjjp2cNJMUxme_ svg{display:inline-block;height:12px;width:12px}._2b2iJtPCDQ6eKanYDf3Jho{-ms-flex:0 0 auto;flex:0 0 auto}._4OtOUaGIjjp2cNJMUxme_{padding:0 12px}._1ra1vBLrjtHjhYDZ_gOy8F{font-family:Noto Sans,Arial,sans-serif;font-size:12px;letter-spacing:unset;line-height:16px;text-transform:unset;--textColor:var(--newCommunityTheme-widgetColors-sidebarWidgetTextColor);--textColorHover:var(--newCommunityTheme-widgetColors-sidebarWidgetTextColorShaded80);font-size:10px;font-weight:700;letter-spacing:.5px;line-height:12px;text-transform:uppercase;color:var(--textColor);fill:var(--textColor);opacity:1}._1ra1vBLrjtHjhYDZ_gOy8F._2UlgIO1LIFVpT30ItAtPfb{--textColor:var(--newRedditTheme-widgetColors-sidebarWidgetTextColor);--textColorHover:var(--newRedditTheme-widgetColors-sidebarWidgetTextColorShaded80)}._1ra1vBLrjtHjhYDZ_gOy8F:active,._1ra1vBLrjtHjhYDZ_gOy8F:hover{color:var(--textColorHover);fill:var(--textColorHover)}._1ra1vBLrjtHjhYDZ_gOy8F:disabled,._1ra1vBLrjtHjhYDZ_gOy8F[data-disabled],._1ra1vBLrjtHjhYDZ_gOy8F[disabled]{opacity:.5;cursor:not-allowed}._3a4fkgD25f5G-b0Y8wVIBe{margin-right:8px} The ex-dividend date is the first day on which a shareholder can sell her stock without losing her dividend rights.You can usually find the ex-dividend date by searching . A stock is ex-dividend if it is purchased on or after the ex-dividend date (or sometimes called the ex-date). This allows the stock that is purchased the day before the ex-dividend just enough time to settle on the record date entitling the investor to the dividend.On the other hand, an investor can sell . .ehsOqYO6dxn_Pf9Dzwu37{margin-top:0;overflow:visible}._2pFdCpgBihIaYh9DSMWBIu{height:24px}._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu{border-radius:2px}._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu:focus,._2pFdCpgBihIaYh9DSMWBIu.uMPgOFYlCc5uvpa2Lbteu:hover{background-color:var(--newRedditTheme-navIconFaded10);outline:none}._38GxRFSqSC-Z2VLi5Xzkjy{color:var(--newCommunityTheme-actionIcon)}._2DO72U0b_6CUw3msKGrnnT{border-top:none;color:var(--newCommunityTheme-metaText);cursor:pointer;padding:8px 16px 8px 8px;text-transform:none}._2DO72U0b_6CUw3msKGrnnT:hover{background-color:#0079d3;border:none;color:var(--newCommunityTheme-body);fill:var(--newCommunityTheme-body)} Ex-dividend means that you are selling the stock but not the dividend that was already declared. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. While the ex-dividend date sits before the record date, the company chooses the record date first. What Does Ex-Dividend Mean, and What Are the Key Dates? ._3Z6MIaeww5ZxzFqWHAEUxa{margin-top:8px}._3Z6MIaeww5ZxzFqWHAEUxa ._3EpRuHW1VpLFcj-lugsvP_{color:inherit}._3Z6MIaeww5ZxzFqWHAEUxa svg._31U86fGhtxsxdGmOUf3KOM{color:inherit;fill:inherit;padding-right:8px}._3Z6MIaeww5ZxzFqWHAEUxa ._2mk9m3mkUAeEGtGQLNCVsJ{font-family:Noto Sans,Arial,sans-serif;font-size:14px;font-weight:400;line-height:18px;color:inherit} It is a share of the company's profits and a reward to its investors. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. Place a sell order for your stock on the ex-dividend date. There are four dates to know when it comes to companies' dividends: the declaration date, the ex-dividend date, the record date, and the payable date. The potential gains from each trade will usually be small. If you were to buy on or after the ex-dividend-date, whether in pre-market trading, regular trading, or after-hours trading, you do not qualify for the dividend. A dividend is typically a cash payment that a company pays to its shareholders as a reward for investing in its stock or equity shares. Importantly, the company announces the dividend per share. This compensation may impact how and where listings appear. Feature, Process, Types, Advantages, and Limitations. His book, "When Time Management Fails," is published in 12 countries while Ozyasars finance articles are featured on Nikkei, Japans premier financial news service. Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. While buying stock right before the dividend date and then selling may seem like a good strategy on the surface, it's often not. Ex-Dividend Date vs. Technically, you can sell stocks on or immediately after the ex-dividend date. The first of these stages is the declaration date. The payment date or "payout date" is the day when the dividends will actually be delivered to the shareholders of a company and credited to brokerage accounts. Any investors who purchase the stock or ETF before the ex-date is entitled to its dividend. Declaration Date. Answer (1 of 3): Companies issue Dividends from their Earnings or Free Cash Flow to be precise. An official website of the United States government. The ex-dividend date for stocks is usually set one business day before the record date. Long-term investors look to hold stocks for years and dividends can help supplement their income. Stock prices tend to rise nearing the ex-dividend or record date. In order to receive the dividend you must own the stock by the close of market on the day before the ex-dividend date. "Ex-Dividend Dates. The ex-dividend date is normally one business day before the company checks its stockholder roster to determine who gets a dividend. How long do you With derivative investment strategies, it is possible to double your money in less than week. Settlement of stocks is a T+3 procedure, which means that when you buy a stock it takes three business days from the transaction date, T, for the stock purchase to be entered into the company's record books. I'm sure some of you know of the situation with TRCH. The strategy requires the ability to move quickly in and out of the trade to take profits and close out the trade so funds can be available for the next trade. Alternatively, some analysts may argue that the company couldnt find reinvestment opportunities. On the ex-dividend date, when the dividends for that quarter are 'registered', the price of the stock goes down to adjust to the reduced EPS, theoretically. @keyframes ibDwUVR1CAykturOgqOS5{0%{transform:rotate(0deg)}to{transform:rotate(1turn)}}._3LwT7hgGcSjmJ7ng7drAuq{--sizePx:0;font-size:4px;position:relative;text-indent:-9999em;border-radius:50%;border:4px solid var(--newCommunityTheme-bodyTextAlpha20);border-left-color:var(--newCommunityTheme-body);transform:translateZ(0);animation:ibDwUVR1CAykturOgqOS5 1.1s linear infinite}._3LwT7hgGcSjmJ7ng7drAuq,._3LwT7hgGcSjmJ7ng7drAuq:after{width:var(--sizePx);height:var(--sizePx)}._3LwT7hgGcSjmJ7ng7drAuq:after{border-radius:50%}._3LwT7hgGcSjmJ7ng7drAuq._2qr28EeyPvBWAsPKl-KuWN{margin:0 auto} To receive a dividend payment, an investor must own the shares on the declared record date. They use whoever is holding stock on market close on ex-div day to then record it on record day. Some stocks pay dividends, which are cash payouts of profits. Dividends also have tax implications for investors, unless you hold the investment in a tax-deferred account like a 401(k). In simple terms, the ex-dividend date marks the end of a cutoff period in which you can purchase a stock to receive its next dividend payment. However, the pay date can occur just a few days after the record date. To determine who qualifies, the company figuratively . For owners of a stock, if you sell before the ex-dividend date, also known as the ex-date, you will not receive a dividend from the company. To understand the ex-dividend date, we need to understand the stages companies go through when they pay dividends to their shareholders. Answer: The ex-dividend date means that owners of record are eligible for all dividends and capital gains distributions. Russell Gold believes the spirit of risk management is most important to long term investment activities. However, if a trader were to buy Apple stock on or after the ex-dividend date, Aug. 9, 2012, he or she does not qualify for the dividend. 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