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Understanding Dividend Dates, Light
A basic, boiled-down, bare bones review of dividend dates.

    
     To receive a dividend you must purchase the stock before the close of trading on the day before  the ex-dividend date.

     For normal dividends, the ex-dividend date is one business day before the record date.  For dividends of 25% or more of a stock's price, the ex-dividend date is the first business day after the payment date.

     Note: The two day settlement period (T+2) does not apply to ex-dividend dates, as they are real-time dates - buy before the ex-date, you qualify for the dividend; buy on or after the ex-date, you don't qualify for the dividend.

     Extended Hours Trading
     Extended hours trading (both pre-market trading and after hours trading) does not affect dividend rules.  The statement in the previous paragraph still applies: buy before the ex-date (no matter if in pre-market trading, regular hours trading or after hours trading) you qualify for the dividend; buy on or after the ex-date (whether in pre-market trading, regular hours trading, or after hours trading) you don't qualify for the dividend.

                   Click Here For a More Detailed Explanation
                             of How Dividend Dates Work
     

Click Here For an Explanation of
Why Dividends Are Not Free Money

Click Here To Read  Owner vs. Owner Of Record:
At What Point Do You Become The Owner Of A Stock?

Click Here To Read  Dividend Dates FAQ

Click Here To Read  What Are Special Dividends?

 

 Comments (17)  

9.07.11; 214332, 10.15.17

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DEFINITIONS

Business Day
A day on which the stock exchanges and the banks, agencies & depositories for securities in New York State are open for business. Any day on which the stock exchanges are open but the banks are closed is not counted as a business day for the purpose of calculating dividend ex-dates.

Conditional Dividend/Distribution A dividend or distribution conditional upon an event or circumstance that has not yet happened at the time of declaration.

Declaration Date                           The date a dividend is declared by the company.  The amount of the dividend is also declared except in some cases of a conditional dividend.

Deferred Ex-Dividend Date
An ex-dividend date that occurs one business day after the payment date. 

Distribution
The payment of cash or securities that are not part of a company's earnings.                                 

Dividend
A payment of earnings to shareholders.

Due Bill
A statement of money owed.

Ex-Dividend/Distribution Date     The first day on which a stock trades without the right to receive the dividend/distribution.

Normal Dividend/Distribution
A dividend/distribution amounting to less than 25% of a company's stock price.

Owner of record
The registered owner of a security on the Record Date.

Payment Date                               The day the dividend payment is
made.

Record Date                                 The day a buyer of a stock must be the registered owner (owner of record) to receive a dividend.

Special Dividend                           A dividend that is not regularly scheduled.

T+2 Settlement Rule
The requirement that securities transactions be settled in two business days.  (Before September, 2017, securities transactions were settled in three business days. Before June 7, 1995, securities transactions were settled in five business days.)

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