A
security which no longer carries the right to the most recently declared
dividend; or the
period of time between the announcement of the dividend and the
payment. A security becomes ex-stock dividend on the
ex-dividend date (
set by the
NASD), which is usually two
business days before the
record date (set by the
company issuing the dividend). For
transactions during the ex-stock dividend period, the seller, not the
buyer, will receive the dividend.
Ex-dividend is usually indicated in newspapers with an x next to the
stock or mutual fund's name. In general, a
stock's price drops the
day the ex-stock dividend period starts, since the buyer will not receive the
benefit of the
dividend payout till the next dividend date. As the stock gets closer to the next dividend date, the price may gradually rise in
anticipation of the dividend.
also called ex-dividend.
