Collecting Devidend?

[#1]

Is it possible that a person can only buy a share just to receive its devidends an sell out just after being paid since the period between the last day to trade and the payment day is about ten days or so. Is this like cheating?

[Russ]

You have to buy before LDT to get div.Usually the share price drops after the div is paid (by about the same amount as the div) so you don't gain anything.

[#3]

Ok! they are very wise. But what if you sell very early in the morning to remaine with some cents in your pockect

[Russ]

Do you mean while everyone else is still sleeping?

[#5]

Ha ha !....Imediatly when the market opens.

[Russ]

I don't know.Why don't you watch a share open at 9am on the div pay date and see what happens?You can check out the pay dates under 'key market statistics-dividends payable'.Looks like the next ones are only on 13 July.

[#7]

I will definately do that. thanks

[annie3]

next ldt is the 3rd

[#9]

I am going to be the most interested person epecialy during the pay day.

[Blik]

It depends wehat the sellers are at, not what you are offering to buy at. Once the divi amount comes off the share price , then the sellers are not going to keep their trades in at the price it was before the div, so irrespective of your offer, the sellers should be lower. Which means you will miss the trade by being greedy. Too many people try this. You cant fool the market, it can only fool you.

[#11]

But on usualy, How long does it take for the share price to rise to the origional price again so that I can sell then.

[Blik]

That depends on the quality of the share. Barry uses this strategy to buy, and I know some others do as well. But what can make or break a big gain is that if you do your research really well and predict a large dividend and get in before the announcment. Because often a share will move up a little just after a big dividend announcment, because everyone wants to get in. Take the recent case of ISA for example. I know this is not a classic or average example, but it moved up from 22 to about 35 on the back of a really good divident announcement. Grindrod didnt drop at all after its last dividend announcement. I guess what I am trying to say is that the quality of the share and the current state of the marked often determines the - how much - a share will drop or gain on the back of dividend announcements. Key is do lots of research. Dont assume a share will climb or drop.

[#13]

Ok! I will be working on that. Thanks!

[SimonPB]

stock will fall on ex-div date - the day after the LDT .. not the pay date ..

[#15]

But what actualy causes this drop.Is the amount of devidend being icluded as the cost within the company, especialy in the share price or this is a way of trying to protect the share price?

[richardw]

Er...traders who understand that it's now worth the dividend less? Would you buy at the same price as it was the day before? The point is that it's not a new "trick" that will take anybody by surprise. And if you're betting on being faster than anyone else out there...that's also likely going to hurt you :)