What is the ex-dividend date?

A company declares a dividend of $0.50 a share with an ex-dividend date on a Wednesday. You own 100 shares when the market closes on Tuesday, so you will be paid $50, even if you sell on Wednesday morning. Someone who buys on Wednesday is not paid; the seller is.

On Wednesday morning the share price often opens about $0.50 lower than it would otherwise, because a buyer from that day on no longer gets the $0.50. Other news moves the price too, so the drop is rarely exact.

JagSim pays a cash dividend on the shares you held before the ex-dividend date began in New York. Shares bought on or after the ex-date are not paid, and shares sold on the ex-date itself still are. The cash normally reaches your account the morning after the ex-date; a real broker pays on the company's payment date, usually some weeks later. The Upcoming dividends card on Portfolio lists the dividends ahead for what you hold: estimates from past payments unless a row is marked Announced. How trading works on JagSim.

The ex-date is the cutoff that decides who is paid, and it is the day the price usually adjusts. Buying just before it to collect a dividend does not create money: the price drop on the ex-date takes back about the same amount, and in a real taxable account the dividend may be taxed.

If I buy on the ex-dividend date, do I get the dividend?

No. To be paid you need to own the shares before the ex-date begins, which means buying no later than the trading day before it.

If I sell on the ex-dividend date, do I still get paid?

Yes. You owned the shares when the ex-date began, so the dividend is yours even if you sell that morning.

Why does the price drop on the ex-dividend date?

From that day a buyer no longer gets the dividend, so each share is worth about that much less. The drop is often close to the dividend, but other news moves the price too.

What are the record date and the payment date?

The record date is when the company checks who its shareholders are; in the US it is now usually the same day as the ex-date, because trades settle one business day after they are made. The payment date is when the cash is paid, often weeks later.