You are entitled to the dividend as long as you are a shareholder of record on the record date of the dividend payment.
It is legal, however, you have to PAY the dividend if you have an open short position on the ex-div date.
I have actually run backtests involving thousands of data points. For instance, buy x days before ex-div and sell y days after ex-div where dividend amount is at least z, testing ranges of values for each variable. None of these strategies make money, even when factoring in the dividend payments. This implies that, on average, the price does go down at least enough to cancel the dividend.
Youâd think it would work over the long term because of those few that donât drop on ex-day like they should. Interestingâ¦.You just saved me a lot of time and effort! Much appreciated.