![]() ![]() Ex-Dividend date: Date on which a stock's price adjusts downward to reflect its next dividend payment.This is usually, but not always, 1 day after the ex-dividend date. Record date: The cut-off date established by the company to determine which shareholders of its stock are eligible to receive a distribution.Declaration date: Date on which a company announces the per-share amount of its next dividend. ![]() Not all companies pay dividends, but if you're investing in options contracts for companies that do pay them, you need to keep several important dates in mind: For example, if you own 100 shares of a stock that pays a $0.50 quarterly dividend, you will receive $50. Cash dividends are paid out on a per-share basis. How dividends workĪ quick review of how dividends work: A dividend represents a payment of a company's revenues to shareholders, most often in the form of cash. ![]() Most experienced investors are familiar with the adage that "if an investment opportunity sound too good to be true, it probably is." While this sentiment may often be associated with overly optimistic assumptions, it also applies to investors who sell options contracts without first considering the ex-dividend date for a stock or ETF. ![]()
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