Dividend eligibility: How long do you have to hold?

[granev]

Hi all , I am new to this and its probably been answered before , but how long do you have to hold a share before being eligable for the dividend ?

For example , today is the 4th , TOL (Toll Holdings) ex date is the 6th ,if I buy them now do I get the div.

If thats the case , do many stocks get sold off soon after the div is paid ?

Thanks in advance

 

[Ashsaege]

Re: How long do you have to hold a share ?

Hi all , I am new to this and its probably been answered before , but how long do you have to hold a share before being eligable for the dividend ?

For example , today is the 4th , TOL (Toll Holdings) ex date is the 6th ,if I buy them now do I get the div.

If thats the case , do many stocks get sold off soon after the div is paid ?

Thanks in advance

If you buy them now Im pretty sure you get the div.

I think after the ex div date, the stocks usually drops by the div amount.

 

[prawn_86]

You need to buy them before the ex div and hold to the record date

 

[granev]

Thanks for that

If the ex div date is 6/3 , and the payment date is 3/4 , then what is the record date ?

 

[captain black]

You need to own the shares at the close of trade the day before they go ex-div. If you sell them on the ex-div day or after you are still entitled to the dividend.

http://www.asx.com.au/products/shares/getting_started/faqs.htm#Dividend dates

 

[alphaman]

The ex-div date is all that matters. You can buy on the day before ex-div date, sell the next day, and the dividend will be sent to you.

 

[granev]

Thank you all

 

[Sir Osisofliver]

WAAAIIIIIIITTTT!


You forgot about the 45 day holding rule.

For full info check here http://www.ato.gov.au/individuals/content.asp?doc=/content/00135936.htm&page=12&H12

Depending upon the amount of dividends you receive in any given tax year, (EG over $5,000) If you purchase a fully franked stock and expect to receive the full dividend amount you must hold the stock for 45 days (not including the day you purchase or the day you sell) - 90 days for preference shares. If you purchase the stock just prior to dividend and sell just after the ex date - your will still receive the dividend - but the franking credits may be stripped from your payment at the end of the tax year.

Sir O

 

[captain black]

Depending upon the amount of dividends you receive in any given tax year, (EG over $5,000)

The 45-day holding rule applies to Franking Credits greater than $5000 in any financial year.

 

[beamstas]

If the ex-date is the 6th, you can buy on the 5th and sell on the 6th, and still get the dividend.

 

[Sir Osisofliver]

The 45-day holding rule applies to Franking Credits greater than $5000 in any financial year.

You are quite right Captain. Forgive my minor slip. It's not something I deal with on a day to day basis, that's why I referenced the ATO website after all, so he can get the information first hand.

Sir O

 

[polartw]

just a note that the dividend is taken off the share price so there really is no point buying right before then sell right after it . in fact it is a bad strategy as a lot of people do it pushin the price further down .

eg. you buy at $2.00 then comes the dividend 8cents. if the stock traded up after dividend to say 2.05, you make 0.05 + 0.08 . you may think you made extra money off the dividend but in reality if the dividend wasnt there, the stock wouldv traded up to 2.13 .

if the stock traded down to say 1.91, it means the stock has droped 0.01 overnight but a further slash of 0.08 is included as it is paid in dividends .

if you buy right before then sell (with the crowd who thinks this is a good strategy), you are selling with masses at an deflated price due to the selling pressure .

there is a excellent strategy for taking dividend into ur favour but that is with options so it is not for this section of the forum .

 

[beamstas]

just a note that the dividend is taken off the share price so there really is no point buying right before then sell right after it . in fact it is a bad strategy as a lot of people do it pushin the price further down .

eg. you buy at $2.00 then comes the dividend 8cents. if the stock traded up after dividend to say 2.05, you make 0.05 + 0.08 . you may think you made extra money off the dividend but in reality if the dividend wasnt there, the stock wouldv traded up to 2.13 .

if the stock traded down to say 1.91, it means the stock has droped 0.01 overnight but a further slash of 0.08 is included as it is paid in dividends .

if you buy right before then sell (with the crowd who thinks this is a good strategy), you are selling with masses at an deflated price due to the selling pressure .

there is a excellent strategy for taking dividend into ur favour but that is with options so it is not for this section of the forum .

There are quite a few ways to profit off dividends.
Rozella on these forums is quite good at it and has written alot about it.

 

[sails]

...there is a excellent strategy for taking dividend into ur favour but that is with options so it is not for this section of the forum .

Polartw, are you aware that dividends are also factored into option pricing?

 

[polartw]

Polartw, are you aware that dividends are also factored into option pricing?

yes , options price accounts for the fact that the share price may fall by a value equal to the gross value of the dividend. IE value of div plus any franking credits .

again, this is not the forum to discuss it so i will end at there, cheers.

 

[sails]

yes , options price accounts for the fact that the share price may fall by a value equal to the gross value of the dividend. IE value of div plus any franking credits .

again, this is not the forum to discuss it so i will end at there, cheers.

Polartw, there are plenty of option threads here at ASF - why not start a new thread in the derivative section to discuss your excellent strategy?

 

[sails]

yes , options price accounts for the fact that the share price may fall by a value equal to the gross value of the dividend. IE value of div plus any franking credits..

Polartw - to the best of my knowledge, franking credits are not factored into the price of an option. Probably because not every one is entitled to get them. Why do you think franking credits are factored into option pricing?



Just a note of caution to other readers as I see potential red flags here - polartw has made only three posts to date in relation to his "strategy", is new to the forum and claims to have an "excellent" dividend strategy which he seems unwilling to discuss. This sort of supposed "secret" can be tantalizing to newbies. If he is willing to discuss his strategy openly and we can get to know him a bit better, it may help to dispel the doubts.

IMHO, it is very difficult to find an edge using options to obtain dividends. MMs have it wrapped up pretty tightly and make sure there's no free lunches at their expense.

 

[polartw]

to what i have been told, franking credits are factored into options as they are still real value which can be realised by the writer, whether they are eligible or not. i picked that up from a trader whom i consider to be expert in the field. im not absolute if its certain or not but i guess it matters little in trading.

just a word to the caution, im not going off topic here into options more than i already have in this thread as this is a topic on eligibility . i was just stating that there are other ways to make dividends in your favour that have worked for me which is probaly not for the person that is interested in knowing how long the share has to be held to receive the dividend. if i am not supposed there are other ways then i apologise and will re edit the post.give me a heads up if thats the case