Ex-Dividend Date
The cutoff date after which new buyers are not entitled to the next declared dividend.
What is Ex-Dividend Date?
The ex-dividend date is the first trading day on which a stock trades without the right to the next declared dividend. To receive the dividend, an investor must own the shares before the market opens on the ex-dividend date. On the ex-date itself, the stock price typically opens lower by approximately the dividend amount, reflecting the loss of that entitlement. The four key dividend dates in sequence are: the declaration date (board announces the dividend), the ex-dividend date (rights cutoff), the record date (official list of eligible shareholders), and the payment date (cash is distributed). Understanding these dates is essential for income investors and anyone trading around dividend announcements.
Example
Apple declares a $0.25 quarterly dividend with an ex-dividend date of November 8. An investor who purchases Apple stock on November 7 or earlier is entitled to the $0.25 dividend. An investor who buys on November 8 or later is not. On November 8, Apple's stock typically opens approximately $0.25 lower, all else equal, as the dividend entitlement has been stripped from the share price.
Source: Investopedia — Ex-Dividend Date