What Is the Dividend Capture Strategy And How Can Investors Use It?

Q: What Is the Dividend Capture Strategy?

The dividend capture strategy is an investment tactic stemming from the fact that investors are entitled to receive a dividend from a company, even if they only hold its stock for a single day, the one before the ex-date. The strategy aims to exploit an alleged difference between theory and practice in stock price movements around that day, and then simply repeat the process with another stock.

The ease in which trading is done noways has boosted the popularity of investment strategies which claim to relax the rules of the long-standing financial relationship between risk and reward, by letting investors enjoy more of the latter without assuming much of the former. One such example is the dividend capture strategy. Before we examine whether this is even possible, we need to look at the dividend payment schedule and highlight the four important dates of the process.

The dividend payment schedule

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What Is the Dividend Capture Strategy And How Can Investors Use It?

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The dividend payment schedule

This article is available only to alvexo plus members, register now, and get 7 days of free membership.

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