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Sunday, December 03, 2006 6:51:34 PM
This is how dividend's work according to Investopedia.
As you can see by the diagram below, if you buy on the ex-dividend date (Tuesday), which is only two days before the date of record, you will not receive the dividend because your name will not appear in the company's record books until Friday. If you want to buy the stock and receive the dividend, you need to buy it on Monday. (When the stock is trading with the dividend the term cum dividend is used). But, if you want to sell the stock and still receive the dividend, you need to sell on or after the XDATE, Tuesday the 6th because it will take 3 days to settle.
1. XDATE-is the day the stock stops trading with the divi
2 RECORD DATE-is the day you must be in the companies record book. Always remember that when a stock is sold it takes 3 days to settle. So you can sell on the XDATE and it will settle on the RECORD DATE so you will be intitled to the divi because you are in their record books.
3. PAYDATE-the day you receive your divi.
As you can see by the diagram below, if you buy on the ex-dividend date (Tuesday), which is only two days before the date of record, you will not receive the dividend because your name will not appear in the company's record books until Friday. If you want to buy the stock and receive the dividend, you need to buy it on Monday. (When the stock is trading with the dividend the term cum dividend is used). But, if you want to sell the stock and still receive the dividend, you need to sell on or after the XDATE, Tuesday the 6th because it will take 3 days to settle.
1. XDATE-is the day the stock stops trading with the divi
2 RECORD DATE-is the day you must be in the companies record book. Always remember that when a stock is sold it takes 3 days to settle. So you can sell on the XDATE and it will settle on the RECORD DATE so you will be intitled to the divi because you are in their record books.
3. PAYDATE-the day you receive your divi.
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