Ex-Dividend, bad behavior

[jerryz]

Quote from Painkiller:

If you don't receive them until the pay date, what would happen if you sold your current shares between the ex-date and the pay date, do you still get the additional shares come pay day?

Thanks

(just a bit confused...) [/B]

You are entitled to the dividend as long as you are a shareholder of record on the record date of the dividend payment.

 

[akawesson]

Quote from dwl603:

what about shorting a stock right before ex-dividen?? is that legal??

It is legal, however, you have to PAY the dividend if you have an open short position on the ex-div date.

 

[akawesson]

Quote from Painkiller:

On the ex date the stock should theoretically drop from the previous day's close by the amount of the dividend it's about to pay. I've analyzed many stocks on and around their ex date and at least half the time, they don't go down at all. Is there any reason or explanation for this? I realize that the price of a stock is determined by those trading it, so is it possible that the laws of supply and demand are overpowering suggested behavior?
:eek:

I have actually run backtests involving thousands of data points. For instance, buy x days before ex-div and sell y days after ex-div where dividend amount is at least z, testing ranges of values for each variable. None of these strategies make money, even when factoring in the dividend payments. This implies that, on average, the price does go down at least enough to cancel the dividend.

 

[Painkiller]

I have actually run backtests involving thousands of data points. For instance, buy x days before ex-div and sell y days after ex-div where dividend amount is at least z, testing ranges of values for each variable. None of these strategies make money, even when factoring in the dividend payments. This implies that, on average, the price does go down at least enough to cancel the dividend.

You’d think it would work over the long term because of those few that don’t drop on ex-day like they should.

Interesting….You just saved me a lot of time and effort!

Much appreciated.