Question about stocks..

[supraman]

Hi there

I was wondering if you could say buy a share on the ex dividend date and then sell it the next day and keep the dividend? Of course the share price would have to be stable.
I did some research and found a site that said the price of the share usually falls by the same amount as the dividend on that date to avoid this arbitrage. Is this the case?

Thanks

 

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[randallg99]

Hi there

I was wondering if you could say buy a share on the ex dividend date and then sell it the next day and keep the dividend? Of course the share price would have to be stable.
I did some research and found a site that said the price of the share usually falls by the same amount as the dividend on that date to avoid this arbitrage. Is this the case?

Thanks

settlement usually takes approx 3 days... buy 3 days before the ex-date and then keep until at the day after x-div

this strategy is not as beautiful as it seems once you find out that typically, the stock will open the following day after ex-date an amount equal to the dividend ...