The ex-dividend date (or ex-date) is the first trading day on which a share is sold without its next dividend. Anyone who buys on that day or later does not receive that payment; it goes to the person who owned the share the day before. A dividend has four dates. On the declaration date the company announces it. The ex-dividend date decides who is entitled to it. The record date is the day the company checks its list of shareholders. The payment date is when the money arrives. For US stocks, since the settlement cycle moved to one business day (T+1) on 28 May 2024 according to the SEC, the ex-dividend date is normally the same day as the record date. Other markets use different cycles, so check your exchange.
Worked example
Company A announces a dividend of $1.00 per share. The ex-dividend date is Friday, and the share closes at $50.00 on Thursday. You own 100 shares on Thursday evening, so you will receive 100 × $1.00 = $100.00 on the payment date. Someone who buys 100 shares on Friday pays about $49.00 each at the open, all else equal, and does not receive the $100.00. The price drops by roughly the dividend because the company will pay that cash out and so is worth about that much less. Your account value does not change from this alone: 100 × $50.00 = $5,000.00 before, and 100 × $49.00 = $4,900.00 in shares plus $100.00 owed to you afterwards.
Why it matters
The ex-dividend date tells you whether you are in line for the next dividend: to receive it you must own the share before the ex-date, not on it. It also explains a drop in price that looks like a loss but is mostly the dividend leaving the company. A common beginner mistake is to think that buying just before the ex-date is free money. It is not, because the price falls by about the dividend, and in many countries a dividend is taxed. The exact dates are announced by each company and published on its investor page and by your broker. A high dividend relative to the price is a question to look into, not a verdict, and this page explains a mechanism, not a strategy.
Frequently asked questions
The record date is the day the company checks who is on its shareholder list. The ex-dividend date is the first day a buyer no longer qualifies. For US stocks, since T+1 settlement began on 28 May 2024, the two are normally the same day. In other markets they can differ, so check your exchange.
No. You must own the share before the ex-dividend date. If you buy on that day or later, the dividend goes to the previous owner.
Because the company is about to pay out cash, so each share is worth about that much less. The drop is usually close to the dividend amount, but other news moves the price too, so it will not match exactly.
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Built & maintained by Worthmap · Last updated November 1, 2026
Educational use only. This tool provides estimates for informational purposes and does not constitute financial, investment, tax, or legal advice. Results are based on inputs you provide and mathematical models, they do not guarantee future performance. Always consult a qualified financial adviser before making investment decisions.