What is the ex-dividend date?
The ex-dividend date is the first trading day on which a stock trades without the right to the dividend the company has just declared. To receive the dividend, you must have bought the stock by the trading day before. On the ex-date, the price typically drops by roughly the size of the dividend.
Buy before the ex-date and you get the dividend. Buy on the ex-date and you do not.
The dates around a dividend
- The general meeting (or the board) declares the dividend.
- The ex-dividend date is the first day the stock trades without it.
- The payment date is the day the money lands in your account — usually a few days later.
There is also a record date, on which the company checks who owns the stock. You rarely need to think about it: it is the ex-date that decides whether you are in.
Why does the price fall on the ex-date?
Because the money for the dividend leaves the company. If a company pays 5 per share, each share is worth roughly 5 less afterwards. That is why the price often seems to fall on the ex-date even though nothing has happened to the company.
Can you profit by buying just before?
Not in itself. The price typically falls by what you receive as a dividend — and the dividend is taxed. Buy the day before the ex-date and sell the day after, and you have usually paid commission and tax to swap price for cash.
The typical beginner's mistake
Buying a stock the day before the ex-date to “catch the dividend” — and being surprised when the price drops the next day. The dividend and the drop roughly cancel out, and tax comes on top.
How you see it in Kiggo
If a company has an ex-dividend date coming up, Kiggo shows it on the stock page, e.g. “Ex-dividend date in 5 days”. In the Overview on the technical page the date sits under “What can move the price”, so you can see why the price steps down that day.
Related terms
Frequently asked questions
Do I need to own the stock on the ex-date itself?
No. You must have bought it by the trading day before the ex-date. If you sell on the ex-date itself, you still get the dividend.
Why did my stock fall on a day with no news?
Check whether it was the ex-date. The price typically drops by roughly the dividend because the money leaves the company. If you owned the stock before, it is not a loss: you receive the amount as a dividend (before tax).
Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated .
Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.
