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.
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?
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.)