Corporate actions
Ex-dividend date
The first day a share trades without the right to the next dividend.
How it works
Buy on or after the ex-dividend date and the seller keeps the dividend. To receive it you must own the shares before that date.
The share price normally falls by roughly the dividend amount on the ex-date, because the buyer no longer gets the payment.
Where it misleads people
Buying just before the ex-date to capture a dividend gains nothing. You pay for the dividend in the price, receive it as taxable income, and are worse off after tax.
Related terms
- DividendA cash payment a company makes to its shareholders out of its profits.
- Record dateThe date on which a company checks its register to see who is entitled to a dividend.
- Payment dateThe date a declared dividend is actually paid to shareholders.
- SettlementThe process of actually exchanging cash for securities after a trade is agreed.
More in Corporate actions
- Guidance
- Earnings surprise
- IPO
- Earnings revision
- Lock-up period
- Earnings announcement
- Merger and acquisition
- Dividend yield
All 26 Corporate actions terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.