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Trading Dividend Stocks on Ex-date

Updated on February 27, 2012

On an average day, as a trader you probably take a look at the latest stock information on an hourly basis. You are trying to figure out if the market is heading up or down. Today in the stock market, is a lot different than a decade ago there is quite a lot more fluctuation in it on a daily basis. Even, if news comes out you think may rally the market in either direction; it seems that the market does not even blink.

There still is one stock that is worth investing in even if the markets are remaining widely unpredictable. At least we still can invest in one stock that seems to give us an edge on earnings that are with dividend stocks.

There are strategies involving dividend stock trading. Here, are some strategies that may help you get a little extra income.

1. Search for stocks that pay dividends on with specific dates in mind (monthly, annually, or quarterly)

2. Two weeks prior to the dividend payout is known as the x-date, as long as you invest prior to that date all your shares will qualify for the current dividend payout.

Of course, it does not matter how long you have owned the dividend stock as long as you own those shares by the x-date then you will receive the dividend payout. So, when researching companies there are also a couple of things you want to keep an eye out for.

When you are, researching the companies upcoming dividend payout you want to make sure that the dividend payout is on track. If, the dividend percentage seems to be getting to high than that may mean the company’s stock price is going down. If, that percentage gets too high above 15% of the stock price the didivend will probably not be as significant as it would have been earlier.

When deciding to purchase dividend shares prior to an x-date make sure that you can realize a percentage back from the share itself. If, the stock you purchase is at 10.00, and the annual amount of the dividend is 1.00 per share then you are getting a 10% payout on the each share. So when the dividend is paid for then you do not want to lose money on the stock itself. So, always look at trying to sell the stock for a higher price. If, the stock is starting to fall, then set up a stop gap in case it decides to fall too far you can sell your shares at a smaller loss percentage. Hopefully no more than 1% because that would wipe out the gains you received on the dividend stock. So, as always do your complete research on the companies that you decide to invest in and keep an eye out for those x-dates they are an excellent way to boost your returns on a yearly basis when the growth stocks are fluctuating so widely.


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  • Kadmiels profile image

    Kadmiels 5 years ago from Florida

    i am looking forward to reading ours as well :) thanks

  • profile image

    theking2020 5 years ago

    Love the strategy as well as the article vote interesting, you should read my article on monthly dividend stocks.