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I have been curious about something that I have never actually seen addressed. I know that with stocks that pay a dividend, they have an ex-dividend date which you must have money invested in the stock by that date to be eligible to receive the dividend. The dividends are paid out a week or two or so later depending on the company.
If I understand this correctly, if you buy shares of a stocks a day or two before that ex-dividend date (that is announced long before it happens). Do you have to leave those stocks intact until the dividend is paid out if you were invested on the ex-div date? Seems like for those that have a great deal of money to buy stocks that they could buy a large chunk of the stock one-two days before the ex-div date. Sell them a day or two later and they would still get the dividend when paid out. They could take the dividend on many stocks over and over with the same say, $1K. Rinse, repeat. Or does it work more like a bank, where to get the interest you must have left the money on deposit for a certain amount of time to receive the interest? Or in this case until the actual date that the dividend is paid out?
If I understand this correctly, if you buy shares of a stocks a day or two before that ex-dividend date (that is announced long before it happens). Do you have to leave those stocks intact until the dividend is paid out if you were invested on the ex-div date? Seems like for those that have a great deal of money to buy stocks that they could buy a large chunk of the stock one-two days before the ex-div date. Sell them a day or two later and they would still get the dividend when paid out. They could take the dividend on many stocks over and over with the same say, $1K. Rinse, repeat. Or does it work more like a bank, where to get the interest you must have left the money on deposit for a certain amount of time to receive the interest? Or in this case until the actual date that the dividend is paid out?
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