dividend distributions and recording time

Discussion in 'Trading' started by stevenpaul, Jun 21, 2009.

  1. Hi Traders,

    I'd appreciate some insight into how dividend payments work. I would like to participate in the dividend distributions of some stocks and ETFs I have and thus must hold the shares through the close of trading on the day before the ex-dividend date. I understand that a stock's price is reduced by the amount of the dividend on the ex-dividend date. What I am wondering is whether it is possible to liquidate the shares in the after hours period, say at 7:30 PM on the day before the ex-dividend date and still be recorded as a holder of the stock. At what time after the market's close is the recording of ownership assessed? If it is at, say 4:30 PM, couldn't one dump the shares just after that and collect the dividend, while avoiding the dip the stock is likely to take the next morning? I imagine the after hours traders may price the stock lower, but in theory would this work?
  2. ?.....By selling before the ex-dividend date, you miss the record date. You are no longer a shareholder of record who can collect the dividend. :cool: