61 votes
Accepted

Is it legal to “mine” dividends?

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 ...
mhoran_psprep's user avatar
28 votes

Is it legal to “mine” dividends?

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 ...
Bob Baerker's user avatar
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21 votes

If an investor does not need an income stream, do dividend stocks have advantages over non-dividend stocks?

There is not a direct advantage (meaning that do not produce actual wealth as you mention), but it can be an indication that the company is a good stable investment. If a company pays dividends, then ...
D Stanley's user avatar
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16 votes
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What are the "capital gains" my ETF is distributing to me alongside its dividends?

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 ...
Ben Miller's user avatar
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10 votes

Is it legal to “mine” dividends?

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. ...
Endy's user avatar
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9 votes
Accepted

Buying puts before dividends get paid out

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 ...
Bob Baerker's user avatar
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8 votes

If an investor does not need an income stream, do dividend stocks have advantages over non-dividend stocks?

It avoids building castles in the air Extremely simplified: there are two factors contributing to a stock price. The first part is a fundamental value, based on the company's earnings, its dividend, ...
Manziel's user avatar
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7 votes

How do U.S. stock exchanges specifically account for dividends and ex-dividend dates?

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 ...
not-nick's user avatar
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6 votes
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Did the 2007 Domino's Pizza special dividend present an opportunity to make an (almost) riskless profit?

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 ...
Bob Baerker's user avatar
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6 votes
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When short selling a dividend stock, what is the earliest date to cover and break even

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 ...
Victor's user avatar
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6 votes

Buying puts before dividends get paid out

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....
Bob Baerker's user avatar
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6 votes
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Can I buy a stock immediately prior to ex div date, then sell after and still get dividends?

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 ...
Robert Longson's user avatar
6 votes

Do dividend taxes affect how much a stock price will fall on the ex-dividend date?

Taxes paid by shareholders would not change the impact of the dividend payment on the price of the stock because it doesn't affect the financial position of the company. Differing tax rates on ...
JohnFx's user avatar
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5 votes
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Stock markets and dividends: When exactly does one need to own shares to be entitled to the dividend?

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 ...
mhoran_psprep's user avatar
5 votes

Is it legal to “mine” dividends?

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 ...
Richard at NorgateData's user avatar
5 votes

How do U.S. stock exchanges specifically account for dividends and ex-dividend dates?

Even if the exchanges were to try to automate or facilitate the expected price drop, it wouldn't accomplish much because the only real price is what traders are willing to trade at, and traders assess ...
nanoman's user avatar
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5 votes

If an investor does not need an income stream, do dividend stocks have advantages over non-dividend stocks?

Just for clarification, a stock's share price drops by the exact amount of the dividend on its ex-dividend date. When trading begins anew that morning, the stock may go up, down or be unchanged. You ...
Bob Baerker's user avatar
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4 votes

Avoiding withholding tax by selling shares before ex-dividend date?

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 ...
Mike Scott's user avatar
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4 votes
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How do U.S. stock exchanges specifically account for dividends and ex-dividend dates?

A statement made by many is that the market determines share price change on the ex-dividend date. This is supported in an article at Investopedia: On the ex-dividend date, investors may drive ...
Bob Baerker's user avatar
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4 votes

Is it legal to “mine” dividends?

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 ...
JimmyJames's user avatar
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4 votes

What are the "capital gains" my ETF is distributing to me alongside its dividends?

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 ...
RonJohn's user avatar
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4 votes

What does a Dividend "will not be quoted ex" mean?

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....
hroptatyr's user avatar
  • 1,762
4 votes

Can I buy a stock immediately prior to ex div date, then sell after and still get dividends?

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 ...
Richard at NorgateData's user avatar
4 votes
Accepted

Ex dividend date once or multiple times a year for a given stock?

What’s not clear to me is if there is only one ex-dividend date per year for a given stock or if there is one every trimester ? There's one ex-dividend date for each dividend payment. Typically that'...
D Stanley's user avatar
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4 votes
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Will a stock always correct itself on the ex-div date?

Yes a stock will on average drop by the amount of a dividend. The actual change can fluctuate during the day just based on normal market fluctuations. But things like market stop and limit orders will ...
D Stanley's user avatar
  • 133k
4 votes

Is there an authoritative source for ex-dividend dates?

A dividend is a corporate event where a company's board of directors decides to pay a dividend. It determines the amount, sets a record date and a payment date. The declaration date is when these ...
Bob Baerker's user avatar
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4 votes

Why does the price of a stock really drop on ex-dividend date?

A dividend does not create any value, it just transfers it. The value of the company (and hence its ownership shares) must drop to reflect the cash that's paid by the dividend. Suppose there was a ...
D Stanley's user avatar
  • 133k
3 votes

Buying puts before dividends get paid out

In the process of writing a book, I wanted to understand if people understand ex-div. In a quick google search I found this and I felt that I would be helpful and chime in. I think that the easiest ...
derivs's user avatar
  • 87
3 votes

Who gets the dividend when a stock is bought/sold around the ex-dividend date?

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 ...
davmp's user avatar
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