Dividend Amount - Equity Derivatives Provision

Template:Eqderivanat Section 10.1. Dividend Amount

10.1(a) Record Amount

10.1(b) Ex Amount

10.1(c) Paid Amount

tThe difference betwixt? All to do with when a Dividend is deemed to occur, and therefore which Dividend Period it falls in. There are four crucial dates: The ex-dividend date, the record date, the declared date, and the paid date.

• Paid versus declared: Firstly, there is “paid” (which features in Paid Amount) versus “declared” (which features in Ex Amount and Record Amount). One pays a dividend days or weeks after one declares it: hence the arbitrage opportunities between those taking cash and those taking scrip. So a Record Amount may fall in the Dividend Period before a Paid Amount. You have to choose which you want.
• Date declared versus date traded ex-dividend: A couple of days before a record date has been declared the Share to which it relates will start trading “ex-dividend” on exchange (meaning a buyer will not get the dividend payment attaching to the share. Why a time before the record date? Because of the settlement time for an equity sale. The holder of record is the one holding the share — since it takes a couple of days to leave the seller’s account and hit yours, trading date on which that economic effect takes place has to anticipate the record date.

See also

• Dividend Payment Date.