Dividend Capture


DEFINITION of 'Dividend Capture'

A timing-oriented investment strategy revolving around the purchase and sale of dividend-paying stocks. Dividend capture is specifically the practice of buying a stock just prior to the ex-dividend date in order to capture the dividend, then selling it after the dividend is paid. The purpose of the two trades is simply to receive the dividend, as opposed to selling at a profit.


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BREAKING DOWN 'Dividend Capture'

Many corporations engage in divided capture trading because of the limited amount of tax that they must pay on the dividend income of other corporations. Dividend capture is synonymous with trading dividends. It should be noted that many financial planners frown on this strategy for individual clients; the amount of time, research and trading commissions necessary to do it successfully often offsets any profits received.

  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Dividend Clientele

    A group of shareholders with a preference regarding how much ...
  3. Corporation

    A legal entity that is separate and distinct from its owners. ...
  4. Dividend Rate

    The total expected dividend payments from an investment, fund ...
  5. Ex-Dividend

    A classification of trading shares when a declared dividend belongs ...
  6. Declaration Date

    1. The date on which the next dividend payment is announced by ...
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