The Impact of the Ex-Dividend Date on Stock Trading

Ex-dividend (abbreviated as xd or ex-div) is a share classification to signify that a declared dividend will go to the seller rather than the buyer. The ex-dividend date represents the first date that the buyer is not entitled to a declared dividend. Before this date, the stock is traded under the classification of cum-dividend.

When a company declares a dividend, it also sets a record date for that dividend, along with a payment date. The record date is the date that a shareholder must be recognized as a shareholder to be entitled to the dividend. The payment date is the date on which the company expects to complete the payment process. After the record date is set, the National Association of Securities (NASD) or the stock exchange set the ex-dividend date.

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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.

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