Distribute Date Record For Free

At the most basic level, you only need to own a stock by the ex-dividend date (or deadline) in order to get the dividend. And you can sell the stock a day or two after that, once everything settles. So in theory, you only need to own the stock for a couple of days to get the dividend.

?Dividend capture strategy? returns are the trading technique of buying a stock just before the dividend is paid, holding it just long enough to collect the dividend, then selling it. If you can sell it for as much as you paid, you have ?captured? the dividend at no cost, other than the transaction costs.

The record date, or date of record, is the cut-off date established by a company in order to determine which shareholders are eligible to receive a dividend or distribution.

The Purpose of Ex-Date and Record Date in the Stock Market So, to simplify it, the record date is the date by which you should be registered on the company's list to receive the dividend, and the ex-date is the cutoff date on or after which you will become ineligible for the dividend.

Anyone owning shares on that day (called the record date) will receive the payment. Because it takes a few days to update ownership records, any trades happening the last few days before the date of record are ex-dividend (the previous owner gets the upcoming dividend).

Example of a Record Date If they buy Beta shares on April 8, their trade will settle on April 10; since they are a shareholder until April 10, they will receive the dividend. But if they wait for a day and buy Beta shares on April 9, which is the ex-dividend date, their trade will only settle on April 11.

If shares are sold on or after the ex-dividend date, they will still receive the dividend. When you purchase shares, your name does not automatically get added to the record book?this takes about three days from the transaction date.

Generally, when a dividend-paying company distributes a large dividend, the market may account for that dividend in the days preceding the ex-date due to buyers stepping in and purchasing the stock. These buyers are willing to pay a premium to receive the dividend.

After a stock goes ex-dividend, the share price typically drops by the amount of the dividend paid to reflect the fact that new shareholders are not entitled to that payment.

Investor take-away While in theory investing one day after the ex-dividend date should lead to the best long-term performance as you get more shares for your invested capital by just waiting an additional 1-2 days.