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Ex-Dividend Date

The ex-dividend date is the first trading day on which a stock trades without entitlement to its most recently declared dividend. Buyers on or after this date do not receive the payout; the seller retains it. Under T+1 settlement, the exchange sets the ex-dividend date one business day before the record date.

HOW IT WORKS

Four dates govern every dividend cycle: the declaration date, the ex-dividend date, the record date, and the payment date. Because stock purchases settle one business day after the trade, a buyer must own shares before the ex-date to appear on the shareholder register on the record date. On the ex-date itself, the exchange reduces the stock's opening reference price by the dividend amount — a $1.00 dividend on a $100.00 stock produces an adjusted opening reference of $99.00. This is a transfer of value from share price to cash, not a loss.

Example: If Coca-Cola (KO) has a record date of Friday, March 14, the ex-dividend date falls on Thursday, March 13. A buyer on Wednesday, March 12 settles in time, receives the dividend; a buyer on March 13 does not.

Key edge cases to know:

  • Short sellers owe the dividend to the share lender for any position held through the ex-date.
  • Options traders face early assignment risk on deep in-the-money short calls the day before the ex-date, as holders exercise to capture the dividend.
  • Special dividends above 25% of the share price follow different rules, with the ex-date falling after the payment date.

IN TAPEBOARD

Use the Tapeboard live scanner to filter for upcoming ex-dividend dates and sort by yield to build or review a dividend capture calendar. The mechanical price drop on the ex-date can appear as a sharp gap down on charts; Tapeboard flags ex-dividend adjustments so you can distinguish a dividend adjustment from a genuine price move. Short position holders receive an alert when an ex-date is approaching to avoid unexpected dividend-obligation charges.

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