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What is 'Ex-Date'

The ex-date, or ex-dividend date, is the date on or after which a security is traded without a previously declared dividend or distribution. After the ex-date, a stock is said to trade ex-dividend. The ex-date is the date on which the seller, and not the buyer, of a stock will be entitled to a recently announced dividend.


Dividend investors pay close attention to the ex-dividend dates of stocks they buy, either to ensure that any new investment will result in the maximum amount of dividend income or to limit their tax liability for unwanted dividend income. It is normal for a stock's price to drop by the amount of the dividend on the ex-date, which reflects the forthcoming reduction in the issuing company's assets as a result of the dividend payout.

Dividend Date Book

The ex-date is not the only dividend-related date investors pay attention to. There are actually four important dates to note for each dividend payment, meaning that a stock that pays frequent dividends can really keep investors on their toes.

The day a company announces that it will pay a dividend in the coming months is called the declaration date. This is the date on which all other information about the dividend payment is released, including the amount to be paid per share and the dates of other important benchmarks, including the ex-date, the record date and the date payable.

The record date is the date on which the company examines its books to confirm the list of shareholders entitled to the current dividend; shareholders who sold their stakes on or after the last ex-date are no longer listed in the company's records. Stock trades typically take two business days to settle, which means that the ex-date must be two trading days before to the date of record to ensure that any buying and selling that takes place has time to clear. The date payable can vary but must always be after the date of record.

Ex-Date Example

Assume that, on September 10, Jane owns 100 shares of stock ABC, which she is thinking of selling. On September 12, the company announces that its quarterly dividend will be payable on December 5, and that it will be due to any shareholders on record as of November 30. Per U.S. trading standards, the ex-date for ABC's stock is November 28, two days before the date of record. If Jane wants to benefit from this dividend payment, she must hang on to her shares at least until November 28.

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  1. Who actually declares a dividend?

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  3. How is the ex-dividend date for a dividend on a stock determined?

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  4. With an ex-dividend, why does the dividend go to the seller rather than the buyer?

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