Financial Term Explorer
Ex-Dividend
The status when dividend rights have been removed from a stock. Buying on or after the ex-dividend date means missing that quarter's dividend.
📝 Definition
**Ex-Dividend** is the state where dividend rights have been separated from the stock. On the ex-dividend date, the stock price theoretically drops by the dividend amount. You must own shares before the ex-date to receive the dividend.
In Simple Terms
The ex-dividend date is 'the day after dividend eligibility closes.' From this day, new buyers miss the current dividend. The stock price also adjusts down by the dividend amount. Buy before ex-date to get dividends.
Example
If Samsung's ex-dividend date is March 28, you must own shares by March 27 to receive dividends. Buying March 28 means dividends go to the previous owner.
💡 Practical Tips
- 1Complete purchases at least 2-3 days before ex-dividend date.
- 2Consider T+2 settlement systems requiring even earlier purchases.
- 3Ex-date price drops are temporary - don't panic sell.
⚠️ Common Mistakes
Many expect dividends when buying on ex-dividend date. Understand the concept clearly.
❓ Frequently Asked Questions
Why does stock price drop on ex-dividend date?▼
The dividend right is removed. Theoretically, price adjusts down by the dividend amount.