What is the ex-dividend date used to determine in stock trading?

The ex-dividend date is used to determine who is entitled to the next dividend. Investors who buy shares on or after that date generally do not receive the declared dividend; the seller remains entitled under the market’s settlement rules.

Before the ex-dividend date, a stock is described as trading cum dividend, meaning with the dividend attached. On the ex-dividend date, the share commonly opens lower by approximately the dividend amount, all else being equal, because new buyers are no longer receiving that payment. Actual price movement can differ because markets respond to many other factors.

The record date is the date on which the company checks its shareholder records, while the payment date is when the dividend is distributed. These dates should not be confused. Settlement-cycle rules determine how the purchase date relates to the record date, and those rules can vary by market and change over time.