Fundamentals

Ex-Dividend Date

The first day a stock trades without its upcoming dividend - you must own shares before this date to receive the payment.

Reviewed by DivAgent Research Team
Updated Jan 2026
Sources
SEC.govNYSE RulesFINRA

Ex-Dividend Date — At a Glance

Definition

The cutoff date for dividend eligibility - buy before this date to receive the upcoming payment, buy on or after and you miss it.

Risk Level
Low
Commonly Seen In
All dividend-paying stocks and funds
Warning Sign
Buying on ex-date expecting the dividend (you will NOT receive it)
Key Metric
T+1 settlement means you must buy at least 1 business day before ex-date
Pro Tip

On ex-date, stock price typically drops by approximately the dividend amount - this is normal market mechanics, not a loss.

Example Tickers
$JEPI$SCHD$O$VIG$JEPQ

The ex-dividend date (ex-date) is the cutoff for dividend eligibility. If you buy shares on or after the ex-date, you won't receive the upcoming dividend. Understanding this date is crucial for income investors and those considering dividend capture strategies.

The Dividend Timeline

1. Declaration Date: Company announces dividend amount and dates 2. Ex-Dividend Date: First trading day without dividend rights 3. Record Date: Company identifies shareholders eligible for payment (usually 1 day after ex-date) 4. Pay Date: Dividend is deposited into your account (typically 2-4 weeks after ex-date)

Why Shares Drop on Ex-Date

On the ex-dividend date, share price typically drops by approximately the dividend amount. This adjustment reflects that new buyers won't receive the declared dividend. For a $1 dividend, expect roughly a $1 price decrease at market open.

Settlement Rules (T+1)

Stock trades settle one business day after execution. To be the shareholder of record, you must buy shares at least one business day before the ex-date. Same-day purchases on the ex-date won't qualify.

Common Investor Mistakes

  • Buying on ex-date expecting the dividend
  • Selling before ex-date and missing the payment
  • Not accounting for price drop when evaluating returns
  • Ignoring ex-dates for covered call assignment timing

Ex-Date Strategies

Some investors attempt dividend capture - buying before ex-date and selling after. However, the price drop often negates the dividend benefit, and short-term capital gains tax can make this strategy unprofitable.

Frequently Asked Questions

Can I buy a stock on the ex-dividend date and get the dividend?
No. You must own the stock *before* the market opens on the ex-dividend date. If you buy on the ex-date, the seller keeps the dividend.
Why does the stock price drop on the ex-dividend date?
The exchange automatically adjusts the price downward by the amount of the dividend to reflect that new buyers are purchasing the company with slightly less cash (since the cash is set aside for the dividend).

DivAgent Educational Standards

This definition is part of the DivAgent Income Academy curriculum. Our glossary is designed to bridge the gap between institutional jargon and retail investor understanding. Each term is reviewed by our Research Team for accuracy, specifically in the context of:

  • Tax implications (Ordinary vs. Qualified)
  • Impact on Total Return calculations
  • Relevance to Option-Income strategies
  • Risk assessment in a retirement portfolio

*While we strive for precision, financial terminology can evolve. Always verify definitions with official regulatory sources (SEC, IRS) when making tax or legal decisions.

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