If you are a stock trader and your trading proceeds are not subject to taxes,what strategy below would work best if you expected that the drop in share price after the ex-dividend date is less than the amount of the dividend?

Question

Quizplus · Accepted Answer

By buying the shares right before the ex-dividend date, the trader will be entitled to receive the dividend payment. If the drop in share price after the ex-dividend date is less than the amount of the dividend, the trader's profit would be the difference between the dividend payment and the expected drop in share price, resulting in a net gain. By selling the shares immediately after the ex-dividend date, the trader may be able to minimize any losses due to the drop in share price.

If You Are a Stock Trader and Your Trading Proceeds