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Ex-date Explained
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| Ex-Dividend |
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Ex-dividend refers to a stock or preferred stock trading without the right to receive an upcoming dividend payment. This ex-dividend condition arises due to the T+3 payment settlement process. You do not fully own stock you bought on Tuesday, for example, until three days have passed or, in this case, Friday. For example, a dividend is declared payable on Jan 14th to holders of record as of Jan 10th. If the 10th is a Monday, then the ex-dividend date would be two trading days prior, in this case the previous Thursday Jan 6th. So if you buy before the ex-dividend date on Thursday, you will receive the dividend. But if you wait to buy until Thursday or Friday then you are not entitled to receive the dividend because you are buying after the ex-date. Ex-date and Ex-dividend are typically used interchangeably to describe stock which is not entitled to receive an upcoming dividend. |
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