If you sell your stock immediately you really have no arbitrage opportunity. You just need to buy your shares before the stocks ex dividend date and sell it on or after that date.
can you buy stock just for the dividend
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The dividend capture strategy is an income focused stock trading strategy popular with day tradersin contrast to traditional approaches which center on buying and holding stable dividend paying.
Can you buy stock just for the dividend. So if you bought the stock the day before ex dividend which is when you have to buy it if you want to collect the payment you bought the stock for 20 you collected the 1 premiumdividend that is paid out on the ex dividend date and then the stock opens at 19. Yes youll get the dividend. If you buy the stock on or after the ex.
Plus ill give you an alternative strategy for purchasing the stock at a discount while reducing your tax liability as well as the impact of dividend payments on options pricing. Why dont investors buy stock just before the dividend date and sell right afterwards. This is known as a dividend capture strategy and the short answer is yesyou can buy a dividend stock just for the dividend payment and then quickly sell it.
But the stocks price will fall by a corresponding amount. You must buy the stock before the ex dividend date in order to be a stockholder of record and thus be eligible to receive the dividend for this quarter. In addition if you dont own the stock for more than 60 days during the 60 days before and 60 days after the stocks ex dividend date your dividends cant be qualified dividends which means the.