# What Is the Ex-Dividend Date? Who Gets the Dividend and Why the Price Drops

Web page: https://uptickflow.com/en/learn/ex-dividend-date  
Updated: 2026-11-06

What the ex-dividend date means: how it differs from the record and payment dates, who gets the dividend, why the price adjusts, and the dividend capture myth.

The ex-dividend date, or ex-date, is the first day a stock trades without the right to its next dividend. Buy before it and the dividend is yours; buy on it or later and the payment goes to the seller. On the ex-date the price usually opens lower by about the amount of the dividend, because that cash is about to leave the company.

Below: the ex-date against the record and payment dates, who gets paid in each case, a worked example of the price adjustment, and why buying just before the ex-date to capture the dividend is not free money. For yield, payout ratio and the wider picture, see [how dividends work](https://uptickflow.com/en/learn/how-dividends-work). Numbers are hypothetical, and this is education, not investment advice.

## What does ex-dividend mean?

Ex means without. A share bought before the ex-date comes with the next dividend, and a share bought on or after it comes without. Companies and exchanges publish the date, and most brokers show it on the stock’s page.

- **Ex-dividend date (ex-date)**: The first trading day on which a stock no longer carries the right to its next dividend. Someone who buys on or after this day does not receive that dividend.
- **Record date**: The day a company checks its register of shareholders to decide who is paid. In the US it is normally the same business day as the ex-date.
- **Payment date**: The day the dividend is actually paid to those entitled to it, often some weeks after the record date.

## Ex-dividend date vs record date vs payment date

Since May 28, 2024, US stock trades settle one business day after the trade (T+1), and you join the company’s register when your trade settles. A purchase on the business day before the record date settles on the record date, so it is the last purchase that qualifies. That is why the ex-date and the record date are now normally the same business day, as in the drawing at the top of the page. Older guides that put the ex-date one day before the record date describe the two-day settlement used until then. A hypothetical calendar:

1. Declaration date: the board announces a dividend of $0.40 per share and sets the dates.
2. Monday, the last day to buy: own XYZ at the close and you qualify.
3. Tuesday, the ex-date and record date: the stock trades without the dividend, and the company reads its register.
4. Payment date, often weeks later: the cash reaches your brokerage account, even if you have sold by then.

## Who gets the dividend if you buy or sell around the ex-date?

One test decides it: did you own the shares at the close of the last trading day before the ex-date? When you sell after that does not matter. With the ex-date on a Tuesday, as in the drawing below:

- You bought last week and still hold: you get the dividend.
- You buy on Monday and sell on Tuesday: you get it, because you owned the shares at Monday’s close.
- You have held for years and sell on Monday: you do not get it, and the dividend goes to the buyer.
- You buy on Tuesday: you do not get it, and the dividend goes to the seller.

## Why does the stock price drop on the ex-dividend date?

A company that is about to pay out cash is worth that much less. Hypothetical: XYZ closes on Monday at $40.00 and pays $0.40, so, all else equal, it opens on Tuesday around $39.60. If you hold 100 shares, you had $4,000 of stock on Monday. On Tuesday you have $3,960 of stock and $40 of dividend to come, still $4,000. Before tax, nothing was gained or lost; the value only moved from the shares to cash.

In practice the adjustment is rough, because the market moves for other reasons that day. A small gap down on an ex-date is not a bearish signal, and many chart platforms can adjust past prices for dividends, which is why two charts may show different old prices. Brokers may also adjust or cancel open orders around the ex-date, so check any you have working.

## Does dividend capture work? The free-money myth

Dividend capture means buying just before the ex-date, collecting the dividend and selling soon after. It looks like free money until you add it up. In the drawing below, you buy 100 shares of hypothetical XYZ at $40.00 and sell at the $39.60 open: the price drop costs $40, the dividend pays $40, 30% is withheld at the default rate for non-US investors (−$12), and an assumed $2 of spread and fees leaves you at −$14.

US taxpayers do not get a clean result either: a dividend on shares held only briefly is generally taxed as ordinary income, because the lower qualified rate requires holding for more than 60 days during the 121-day period that begins 60 days before the ex-date. Some stocks regain the drop quickly and others do not, and that recovery is ordinary market movement, with the same risk as any other purchase. If you want dividend income, the decision belongs with the company and its valuation; see [dividend investing](https://uptickflow.com/en/learn/dividend-investing).

## When is the ex-date different? Special dividends and other markets

Large special dividends follow another rule. When a dividend is 25% or more of the share price, the US ex-date is set after the payment date, normally the next business day, and shares sold in between carry the right to the dividend with them. Always read the announcement for an unusually large payment.

Outside the US, the gap depends on settlement. Where trades still settle in two days, as on the main European markets in 2026, the ex-date usually falls one business day before the record date. In France, the ex-date is often called the date de détachement. In Saudi Exchange announcements, the Arabic entitlement date usually means the day you must own the shares at the close, as [how dividends work](https://uptickflow.com/en/learn/how-dividends-work) explains. Use the calendar published by the company, the exchange or your broker.

## Key takeaways

- The ex-date is the first day a stock trades without its next dividend: own it at the prior day’s close to get paid.
- With US T+1 settlement, the ex-date and record date are normally the same business day; you can sell on the ex-date and still receive the dividend.
- The price usually opens lower by about the dividend, so 100 shares at $40.00 become $3,960 of stock plus $40 of cash.
- Dividend capture is not free money: the drop offsets the dividend, then tax and costs come out.

## FAQ

**If I buy on the ex-dividend date, do I get the dividend?**

No. The ex-date is the first day the stock trades without the dividend, so the seller receives it. You must buy by the close of the last trading day before the ex-date.

**Can I sell on the ex-dividend date and still get the dividend?**

Yes. If you owned the shares at the close of the day before the ex-date, you are entitled to the dividend even if you sell on the ex-date or later.

**Do I have to hold the stock until the payment date?**

No. The payment date is only when the cash arrives. You qualify at the close before the ex-date, and the payment reaches you even if you no longer hold the shares.

**Is the ex-dividend date the same as the record date?**

In the US, normally yes, since the move to T+1 settlement in May 2024. Very large special dividends are an exception, and markets on two-day settlement usually place the ex-date one business day earlier.

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Educational content, not financial advice. Trading involves risk of loss. https://uptickflow.com/llms.txt