A company’s dividend is not simply paid to whoever is holding the stock on the day the dividend is paid. Instead, an “ex-dividend” date is set, often several weeks before payday. If you buy shares of a dividend-paying stock on or after the ex-dividend date, you won’t receive the upcoming dividend payment. The person who owned the stock when it went ex-dividend gets that chunk of change. Stocks trading ex-dividend often have an “x” next to their listing in newspapers.
You might think it would be a neat trick to buy such stocks just before they go ex-dividend, so that you can quickly profit from the dividend amount. But stock prices get adjusted downward around the ex-dividend date to compensate for the upcoming dividend payout. As Snidely Whiplash would mutter, “Curses! Foiled again!”
