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Online Share Trading

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ex dividend

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nala
Super Contributor
hi forumites what does it mean when a share is trading exdividend?
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2 REPLIES 2
olilau
Frequent Contributor
hello nala when a company declares a dividend to its shareholders, cum and ex div define who has the rights to the dividend before the dividend is paid, and at payment date while the share still continues to trade. a share will trade cum div until LDT (last day to trade). if you buy a share at or before LDT, you as the buyer will be entitled to the dividend already declared when it is paid out. generally on LDT, the share price will drop by the amount of the dividend and will start trading "ex div" at that point. if you buy the share then, you will get it "at a discount" but you will not get the dividend which is usually paid a few days later. the previous owner will. ex div thus defines the time the share price trades excluding the right to the dividend, which is after LDT and before the dividend is actually physically paid.
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prancing_horse
Super Contributor
Share price does not generally fall by the dividend amount on LDT, but the following day when it then trades ex div
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