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

Buying the shares before the ex-dividend date will entitle the trader to receive the dividend. If the drop in share price after the ex-dividend date is less than the amount of the dividend, the trader can sell the shares at a lower price but still come out ahead due to the dividend received. Therefore, selling the shares immediately after the ex-dividend date will still result in a profit.

If You Are a Stock Trader and Your Trading Proceeds