ex dividend

Discussion in 'Trading' started by Sky123987, Apr 7, 2009.

  1. if the ex dividend is tuesday sept 11, and the dividend is $2.

    If the close on monday sept 10th, was $50, you would expect the stock to open at $48. Correct?
     
  2. CORRECT
     
  3. MTE

    MTE

    In theory yes, but in practice the stock doesn't trade in a vacuum so other things may impact the stock price and it may not open exactly at 48.
     
  4. The market will "compel" your stock to open higher and trend higher because of the 8th anniversary of "September 11th".
     
  5. If a stock closes on Monday at $50 and there's no dividend involved, you would expect it to open on Tuesday at $50. But it usually doesn't happen because of other factors that have affected the company and the market as a whole since the previous day's close. The same thing is true with a dividend. The stock price adjusts downward but other factors add or subtract from this affect.
     
  6. Close. My answer is that it should drop by the after tax value of the dividend based on the tax rates of the major players in that stock. Of course subject to the market movements the other posters mentioned.

    There was a thread maybe 2 weeks ago in the trading section where this subject was beat to death, partly by me.
     
  7. When the stock goes ex-div, its price will be reduced by $2. Where it opens on on Tuesday will depend on the buying and selling pressure of the orders that morning. If there are no orders, it will be $48
     
  8. Nahhh, it was beaten almost to death. It's still alive.

    :)