Why Playing With Ex-Dividend Dates Isn't Worth It

Can you play with an Ex-Dividend date? Is there a way to make a quick buck by trading the stock according to when it pays its dividend? Do you believe in elves and hobbits? Okay… maybe some people look like hobbits… so maybe playing with Ex-dividend dates work… Let’s take a look at this trading “strategy”. How Can You Make Money By Playing The Ex-Dividend Date I assume you probably are familiar with the Ex-Dividend date concept. So let’s take a look at an example on how you could possibly make money by playing with the Ex-Dividend date: Stock X trades at $10 and issues a $1 annual dividend paid quarterly (so $0.25 per quarter). On May 1st, Stock X announces its dividend payout to be distributed on May 25th. In order to receive the dividend, shareholders must own the stock on May 23rd. May 23rd is the ex-dividend date. Which means that if you purchase your stock on May 24th, you won’t be getting any dividend payout from the previous quarter. So what happens to the stock on the ex-dividend date? Technically, if the market wasn’t playing on the stock and we would just look at the intrinsic value of it, the value should decrease. The shareholder prior to this date will receive a dividend and if you buy it after the ex-dividend date, you won’t get it. Therefore, some people think that you can play with the ex-dividend date and earn money. Unfortunately, playing with the ex-dividend dates is so simple. Monitoring Ex-Dividend Dates The first problem you will encounter is tracking the Ex-Dividend dates. Technically, there are no global sources to find this information as it requires a lot of time to gather all the information together. On one of my other sites, we monitor the TSX Ex-Dividend Date on a monthly basis. However, these dates are mostly estimates from financial analysts and can be different than the Ex-Dividend date announced by the company at a later date.... Read more

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