# What Is an Ex-Dividend Date?

> The ex-dividend date is the cutoff to qualify for the next dividend. You must own the shares before it to be paid; buy on or after and the seller collects that dividend.

## The four key dividend dates

| Date | What happens |
|------|-------------|
| Declaration | Board announces the dividend and all dates |
| Ex-dividend | Cutoff — own shares before today to qualify |
| Record | Company checks registered shareholders |
| Payment | Cash is paid out |

## Why the ex-date exists

Trades take time to settle, so exchanges set the ex-date as a clean line between buyers who qualify and those who don't. Sell on or after the ex-date and you still keep the dividend.

## Why the price drops on the ex-date

A stock opens lower by ~the dividend amount on the ex-date — not a loss, just cash leaving the company and new buyers not receiving the payment. A $50 stock paying $1 opens ~$49.

## Does timing the ex-date pay off?

Trying to "capture" dividends by buying before and selling after rarely produces free money (the price drops by ~the dividend) and can trigger taxes and costs.

## Never miss a date

The Dividend Tracker (/dividend-tracker) monitors ex-dates and payment dates for every holding automatically.

## FAQ

**Do I get the dividend if I buy on the ex-dividend date?** No. To receive the dividend you must own the shares before the ex-dividend date. If you buy on the ex-date itself, the seller keeps that dividend.

**Can I sell on the ex-dividend date and still get the dividend?** Yes. If you owned the shares before the ex-date, you qualify for the dividend even if you sell on or after the ex-date.

**Why does a stock drop on the ex-dividend date?** The price typically falls by about the dividend amount because that cash is leaving the company and new buyers no longer receive the upcoming payment. It's a mechanical adjustment, not a loss of value.

## Related reading

- Dividend Investing Guide (/learn/dividend-investing-guide)
- How to Calculate Dividend Yield (/blog/how-to-calculate-dividend-yield)
- Dividend Tracker (/dividend-tracker)

Track dividends free: https://foliofundamentals.com/dividend-tracker