61

Is it legal to buys Stock A on June 30th, sells it on July 2nd, then buy Stock B on July 14th, sells it on July 16th, then buys Stock C on July 30th, sells it on August 2nd... and continues this process to “mine” dividend payouts? Yes it is legal to do this. If a person is allowed to buy and sell shares they can do exactly this. They still have to ...


28

You can buy any or all of those stocks if you have the cash (or margin) to do so. But why would you, just because they pay a dividend? Suppose you buy stock (A) at the close today for $100 and tomorrow it pays a quarterly dividend of $1. Tomorrow's adjusted close will be $99. If there is no buying or selling pressure when trading resumes in the morning, ...


15

Although an ETF trades like a stock, it is really a stock mutual fund. And like all mutual funds, when you invest there are two ways that you realize a capital gain. As you mentioned, you have a capital gain when you sell a stock for more than you purchase it for, so when you finally sell this ETF, you will have a capital gain if the value of the ETF has ...


15

You will need to buy a stock before the ex-dividend date to receive the dividends. You can sell a stock on the ex-dividend date or after and you will receive the dividends. So if the ex-dividend date is the 5th August, you need to buy before the 5th and you can sell on the 5th or after, to receive the dividends. Definitions from the ASX: Record date ...


10

When you short a stock and the stock goes ex-div. you have to pay out an amount equal to the dividend. So in your example, GG would short the stock at $10.00, buy back at $9.00 and be charged $1.00 for the dividend. Net effect $0.00.


9

Here is the definition of Ex-dividend date from the SEC: Once the company sets the record date, the stock exchanges or the National Association of Securities Dealers, Inc. fix the ex-dividend date. The ex-dividend date is normally set for stocks two business days before the record date. If you purchase a stock on its ex-dividend date or after, you will ...


9

There have already been good answers explaining that your strategy is neither illegal nor profitable, but no one has explained what forces the stock price to drop ex-dividend. Dividend arbitrage. Arbitrage means (more or less) riskless profit. Here's an unrealistic, simplified version: Let's say there's a stock selling for $100 today. Let's say it will ...


8

Post some replies to other questions and you'll have a 50 reputation in no time. Or make the check payable to me for overnight service ;->) Here's part of my answer from the link: "There are no free lunches and if it sounds too good to be true, it is." I suppose you want something of greater substance than that, eh? If there is a pending ex-div date, ...


7

As the record date is 7th August, you need to hold stocks on the 7th August closing. You need not hold it till 2nd Sept. The list as taken on 7th August would be processed and instructions given to Bank and the dividends credited by 1st Sept. Edit: To Clarify Victor's comment Typically from the time one sells the stocks to the time it actually gets ...


6

The short answer is that there are no free lunches. If you own the stock, you get the dividend and as such, share price is reduced by the amount of the dividend. As to the confusion... Yes, you must own the stock on the record date to get the dividend and since the ex-div date is usually 2 days prior to the record date, you must own the stock before the ...


6

When buying stocks the latest you need to buy to get the dividends is the day before the ex-dividend date. If you buy on the ex-dividend date you will miss out on the dividends. So if you are shorting stocks the latest date you can cover your position and not have to pay out the amount of the dividend is the day before the ex-dividend date. If you are ...


6

You can do that, and yes you'd get the divident payment, but you'll find that on average the price of the stock will decline by the dividend amount once it goes ex-dividend so you'll not make any money by doing this. In fact you'll likely lose money once you take transaction costs into account.


5

No, they do not. Stock funds and bonds funds collect income dividends in different ways. Stock funds collect dividends (as well as any capital gains that are realized) from the underlying stocks and incorporates these into the funds’ net asset value, or daily share price. That’s why a stock fund’s share price drops when the fund makes a ...


5

Ex-Date is a function of the exchange, as well as the dividend. Consider Deutsche Bank AG, DB on the NYSE, DKR on Xetra. For a given dividend, each exchange sets the ex-date for trades on that exchange. (See http://www.sec.gov/answers/dividen.htm for a description of how it works in the US; other exchanges/countries are similar.) This ex-date is normally ...


5

It is perfectly legal to buy and sell a company's stock before/on/after ex-dividend dates. In some countries, such as Australia, there exists a tax system called "Dividend Imputation". What this means is that any (previous) company tax paid (Australian company tax rate = 30%) to the Government can be "franked" against the dividend paid, such that the ...


5

According to yahoo finance the ex-dividend date is 2019-05-16. Here is the definition of Ex-dividend date from the SEC)(pulled 15 May 2019): To determine whether you should get a dividend, you need to look at two important dates. They are the "record date" or "date of record" and the "ex-dividend date" or "ex-date." When a company declares a ...


4

Here's an example from today that demonstrates my previous explanation about the relationship of put and call premium to a dividend. CE closed at $113.98 today. The August $110 call closed at $4.40 x $4.90 and the Aug $110 put closed at $0.90 x $1.10 . The spreads are pretty wide and fair value is somewhere in the middle. I'm going to take the liberty ...


4

The ex indicator is meant to be a help for market participants. On the ex-day orders will go into a different order book, the ex order book, which at the start of the ex day will be totally empty, i.e. no orders from the non-ex day book have been copied over. Why does this help? Well imagine you had a long-standing buy order in the book, well below the ...


4

I think the answer is here: https://money.stackexchange.com/a/14464/22266 Your mutual fund manager buys and sells securities in pursuit of the investment strategies of the fund as well as to invest new money coming in and to pay out investors wanting to take their money elsewhere. This results in capital gains and losses for the fund. The net capital ...


4

I think to really help you understand why this is unlikely to work, we need to talk about the value of a stock. In finance theory, the intrinsic value of any instrument is function of is the present value of it's future cash flows. For stocks that basically means dividends. A common approach is to use the discounted cash flow model. In a nutshell, ...


3

You must own the shares prior to the ex-dividend date. Whatever you buy or sell on or after the ex-dividend day you will not receive dividends for. So you would get $25 in dividends based on the 100 shares you owned before the ex-dividend date.


3

You went from potentially owing the dividend to being neutral, not owing. Not getting. Your position was -100, then 0, not positive. The guy you borrowed from gets her dividend regardless, if not from you then from the company paying its dividend.


3

You’ve gained 48 shares, but you’ve lost the dividend your 3,006 shares would have paid if you’d just kept them. Assuming the markets have priced it correctly, which they usually do, those are worth pretty much the same and your net gain is zero.


3

I believe that the confusion here may be the result of mixing up two different types of prices - what we might call "official" prices and "market" prices. The exchanges issue official prices. They issue an official closing price and an official opening price. These prices are used by the various brokers and clearing houses to value their positions and to ...


3

As described, you would still receive the dividend. As long as you hold on the close of the day prior to the ex-dividend date, you will receive the dividend. You can also sell it on the open of the ex-dividend date too. So, in your example, you could sell it on the open of Aug 31st. There is no dividend-related benefit to buying the stock earlier, but ...


2

The ex-dividend date is the first date on which you may sell without losing your dividend. In this case that date is August 5th (thanks, Victor). The price opens on the ex-dividend date lower than it closed on the previous day (by the amount of the dividend). Therefore you may sell any time on August 5th (including during pre-market trading) and still get ...


2

Your understanding is incorrect. The date of record is when you have to own the stock by. The ex-dividend date is calculated so that transaction before that date settles in time to get you listed as owner by the date of record. If you buy the stock before the ex-dividend date, you get the dividend. If you buy it on or after the ex-dividend date, the ...


2

I know that in the case of cash dividends I will get the dividend as long as I bought the stock before the ex-date but what happens in the case of an stock dividend? This is same as cash dividends. You would receive the additional stock.


2

Economic theory states that the value of a security will drop by the dividend amount at the same instant that the dividend is paid (or committed, or allocated, or whichever equivalent verb you want to use). But I would contend that the theory here is outweighed by a lot of other variables that impact the price of that security. If you assume that all the ...


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