Ex-dividend Date
The ex-dividend date is the cut off day you must own shares to qualify for the next dividend.
Quick reference:
Purpose: Decides who receives the dividend. Timing: Usually a few days before the payment date
Key: If you buy after this date, you miss out on the dividend. Impact: Share price often drops slightly on this day.
Expanded explanation:
When a company announces a dividend, it sets an ex-dividend date. If you buy shares before this date, you will receive the dividend. If you buy on or after this date, you won’t receive the dividend, the seller keeps it instead.
On the ex-dividend date, share prices usually fall by roughly the same amount as the dividend, because the value of the cash is leaving the company.
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