Dividend Question

Discussion in 'Trading' started by switze22, Jan 27, 2008.

  1. So, I have been reading that between a Stocks "Ex-dividend date" and "Payable Date", the stock will go down basically the amount of the dividend.

    If this happens, why not just short the stock right before the ex-dividend date every time?
     
  2. if your short the stock on that date, you will have to pay the dividend. so it would be a wash. what you can look for is stocks running up the 2-3 weeks before ex-date as yield hounds get in
     
  3. Now I'm wondering if there are any high yield stocks that pay only one annual dividend.
     
  4. JOEEXEX

    JOEEXEX

    would you want div. once a year instead of every q will lose the compounding ? which is one of the wonders of it all.
     
  5. lescor

    lescor

    This question has been answered on this site dozens of times.

    On the ex date the stock will drop by the amount of the dividend, plus or minus whatever it is doing as a result of news or the market in general. If you come in short on the ex date, you will pay the dividend to the holder of the stock (remember you are selling someone else's shares when you go short).

    It does not matter how often the stock pays a dividend or what the size of the payment is, either way it's a wash. Did you think the market handed out free money as simply as that?