A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Ex-Dividend Date

A date before the record date by which you must own the stock and have it in your account in order to receive a corresponding dividend from the company. Because of the trade settlement rules, open-market buyers must purchase the stock by the ex-dividend date (i.e. three business days before the record date, though some stock trades may settle quicker) to qualify for receiving a dividend. (A stock is said to be trading "ex-dividend" when a buyer acquired it too late to receive an upcoming dividend.)

An exercise of employee stock options creates immediate ownership of the shares. You could thus exercise on the record date and become a record owner on that day. However, at some companies employees must exercise by the ex-dividend date to receive the dividend. Depending on whether your company pays dividends with restricted stock or dividend equivalents with RSUs, the date of grant or the date of vesting may be considered the equivalent of the record date. See the section on dividends elsewhere on this website.

Return to list Register Now

Try the new myStockOptions.com Glossary App! Now available for Android and iOS.

Get it on Google Play
The content is provided as an educational resource.
myStockOptions.com shall not be liable for any errors or delays in the content, or any actions taken in reliance thereon.
Copyright © 2000-2022 myStockPlan.com, Inc. U.S. Patent 7,353,200.
Contact editors@mystockoptions.com for licensing information