Ex-Dividend Date

Ex-dividend date is the day after which a stock trades without a dividend in its price(hence “ex-dividend”). It is usually two days before the record date.

Since the settlement process in the US follows the T+3 rule(transactions are settled 3 days after the day the trade was made)  an investor who buys the stock 3 days or 3 days before the record date is eligible to the dividend. Therefore investors who buy on or after the ex-dividend date are no longer eligible to the dividend. A stock’s price falls approximately the amount of the dividend on the ex-dividend date.

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