Has anyone ever tried the strategy of dividend capturing? (Buying a stock right before the ex-dividend date, collecting the dividend, and then selling the stock). I've heard that right after the dividend is payed out the stock will trade that much lower the next day. Is this true? If it is wouldn't that kind of make the strategy worthless?
Or.....what if you had two accounts and bought the stock in one and shorted it in another? Is this possible/legal? If you could do it, technically you'd have a zero risk position. The only way your return would go down is on slippage and commissions. This is probably not the most exciting strategy in the world, but if you could do it once a week making 1% or so on your investment, you'd have a pretty darn nice zero risk return by the end of the year. This would be a pretty cool investment idea for a long term account.
Just for your info if you are short the stock on dividend date than you owe that much to your brokerage firm on the payout date. So you would have 0 risk and zero reward.
There is a way of profiting from this and that's your clue.
Which is something I do but I'm not about to post something like this on a message board (only works when small # of guys do it)