In stock-market terminology, what is an ex-dividend date?

In stock-market terminology, the ex-dividend date is the first trading date on which a share trades without the right to receive a declared dividend.

To receive a dividend, an investor generally must own the stock before the ex-dividend date, subject to the applicable settlement rules. Investors who buy on the ex-dividend date or afterward usually do not receive that particular payment. The company also announces a record date, which identifies shareholders recorded as eligible.

On the ex-dividend date, the share price may fall by approximately the dividend amount in theory because the stock is trading without that upcoming distribution. Actual prices also reflect market movements, taxes, expectations, and other information, so the change is not guaranteed to equal the dividend.

The ex-dividend date is not the payment date. The payment date is when the company distributes the cash, often weeks after the ex-date. Dividend calendars should be checked carefully because dates and settlement conventions can vary by market.