Template:Record date and ex date: Difference between revisions

When a [[stock]] is trading with a declared {{eqderivprov|dividend}}, there are two important dates: the “[[record date]]” or “[[date of record]]” and the “[[ex-dividend date]]” or “[[ex date]]”.  

There is a charming {{tag|Latin}}ny feel to all of this, stocks trading “[[cum]]” (''with'') or “[[ex]]” (''without'') [[Dividend - Equity Derivatives Provision|dividends]], all based on when, relative to the [[ex date]], you bought or sold them.  

 

'''[[Ex-dividend date]]''': The [[ex date]] — the date on which the shares stop trading “dirty” and start trading “clean” — i.e., minus the value of a declared-but-as-yet-unpaid dividend — is set based on [[stock exchange]] rules. It is usually set one [[settlement cycle]] or [[business day]] ''before'' the [[record date]]. Sensible reason for this: If you trade a stock after this date, it won’t settle until ''after'' the [[record date]], so you won’t be entitled to the dividend. Hence, you shouldn’t have to pay for the value of the declared dividend. The [[ex date]] — in the shape of the {{eqderivprov|Ex Amount}} — is a theoretical means for paying {{eqderivprov|Dividend Amount}}s under a {{eqderiv}} confirmation, though hardly a practical one, as no [[swap dealer]] we have encountered<ref>You’d have to be eagle-eyed, mind: a [[swap dealer]] ''that'' stupid would be out of business PDQ.</ref> would ever be insane enough to pay out a dividend before one is actually paid on the underlying for the {{eqderivprov|Transaction}}.

Incidentally, beware [[cum-ex trade]]s, which are (a) a highly imprisonable form of tax fraud; and (b) liable upon a cursory google to take you to parts of the world wide internets that your compliance department might not appreciate you visiting. Especially, I hear, if you google “Danish Cum-Ex”<ref>If you dare,{{google|Danish_Cum_ex}}</ref> or “German Cum-Ex”<ref>If you dare, {{google|German_Cum_ex}}</ref>. In any case fertile ground for [[double entendre]]s if you have any literal-minded [[US attorney|American]]s in your office you fancy having fun at the expense of.

 

{{sa}}