Dividend Rollover Plan

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Dictionary Says

Definition of 'Dividend Rollover Plan'

An investment strategy in which a dividend-paying stock is purchased right before the ex-dividend date, which gives the purchaser the right to the divided, with the position being sold off shortly after the ex-dividend date. The sole intention of this practice is to reap the value of the dividends while breaking even on the shares. Ideally, this strategy is designed to maximize short-term return on shares while minimizing risk.        

Also known as a "dividend capture strategy". 

Investopedia Says

Investopedia explains 'Dividend Rollover Plan'

For example, suppose that XYZ Corp. announces that it will distribute a dividend of $2/share and that the ex-dividend date will be on March 16.  Joe can attempt a dividend rollover plan by buying the XYZ Corp. stock on March 15 (or any other day before the March 16) and then selling the shares on March 16 to regain most of the purchase value of the shares. Ideally Joe should profit by $2/share (the dividend's value). 

Proponents of dividend rollover planning argue that immediate returns on investments are made while reducing risk. However, opponents of the strategy believe that the expected dividend value is already incorporated into the stock before the ex-dividend date because the market anticipates the dividend payout.
 

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'Dividend Rollover Plan'

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