Reward 1000 Tiger-coinsHi Tigers,
This week $Lowe's(LOW)$ $Procter & Gamble(PG)$ $Caterpillar(CAT)$ are going to ex-dividend.
The dates and yields information are as below:
Twitter: @DividendWave
There are some notes on the possible influences on prices, and how to trade the stocks or related options, hope its helpful for you.
What Is Ex-Dividend?
Investopedia explains thatEx-dividend describes a stock that is trading without the value of the next dividend payment. The ex-dividend date or "ex-date" is the day the stock starts trading without the value of its next dividend payment.
Typically, the ex-dividend date for a stock is one business day before the record date, meaning that an investor who buys the stock on its ex-dividend date or later will not be eligible to receive the declared dividend. Rather, the dividend payment is made to whoever owned the stock the day before the ex-dividend date.
KEY TAKEAWAYS
- Ex-dividend is when a company's dividend allocations have been specified.
- The ex-dividend date of a stock is the day on which the stock begins trading without the subsequent dividend value.
- Investors who purchased the stock before the ex-dividend date are entitled to the next dividend payment while those who purchased the stock on the ex-dividend date, or after, are not.
- The ex-dividend date occurs before the record date because a stock trade is settled "T+1" meaning that the record of that transaction isn't settled for one business day.
The essence of dividend distribution is to distribute a portion of profits to shareholders. It is very necessary for investment transactions to understand the specific methods of dividend distribution and the impact on stock prices.
After a company has been in operation for a period of time (usually one year), if the operation is normal and profits are generated, it will distribute dividends and bonuses to shareholders.
Usually the higher the implementation ratio of the listed company, the greater the decline in the par value of the stock. Investors need not worry because the number of shares of the investor increases as well as having cash dividends, etc. The overall stock capital value of the position after the other price will not change and investors will not suffer a loss of capital.
There are generally three delivery methods:
1. Pay shareholders in cash. This is the most common and common way and is used by more than 80% of companies in the United States.
2. The allotment of shares to shareholders. This method is mainly used to keep the funds in the company to expand operations and to pursue the long-term interests and long-term goals of the company's development.
3. Distributes the company's products to shareholders as dividends and bonuses.
In the stock market, if an investor avoids the ex-dividend tax charged on dividends, then the investor can sell the stock before the ex-dividend date.
If the investor continues to be optimistic about the subsequent price increase of the stock, then the investor can still hold the stock on the ex-dividend date.
If the investor is not optimistic about the subsequent price increase of the stock, then the investor can sell the stock on the ex-dividend date. Usually the ex-dividend date does not affect the investor's stock trading.
Why dividends are bad for the value of buy options?
A dividend is a distribution of the company's accumulated cash to shareholders.
A buy option is an agreement to buy shares at an agreed price at a certain time in the future.
Because of the dividend, the value of the company decreases, but the agreed-upon purchase price remains the same, so of course buyer lose out.
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