What is an Ex-Date or Ex-Div Date

Ex-Date or Ex-Div Date is always encountered once a listed company declares to give out dividends to stockholders either in the form of cash or stocks.

Actually there are three dates mentioned in the dividend announcements of companies.  It is the ex-date or ex-div date, record date and the payment date but the most important date that should be watched out is the ex-date or ex-div date.

The ex-date or ex-div date is the cut-off date where all stockholders who hold a share of stocks as of the previous day is entitled for a share in the dividend allocation.

For example, if a company declares to give out dividends and the ex-date or ex-div date specified is August 3, all stockholders holding a stock share until August 2 will be entitled to the dividend payment.

Mostly the dividend declaration announcement is being done one or two weeks before the ex-date, that gives time for investors to buy the stocks in order to be entitled for a dividend.  The stock price during this period usually goes up.

If you want, you can sell your stock shares the day after the ex-date or ex-div date … you will still be entitled for the dividend but usually, the stock’s price drops down during this period.

What is a Stock Market

  Some of my friends and officemates learned that I am investing/trading in the stock market.   Others are eager to know and learn about it and so a lot of questions are being raised.   So I thought of blogging the information I learned so every time they ask questions, I will just refer them to this blog.  This may also help others out there who are interested to know more about this market.  

Before anything else, let us start by knowing what a stock market is.  Stock market just like any market is just a place where buying and selling takes place but instead of goods, shares of companies or otherwise known as stocks are being bought and sold here.  Once you have bought a certain share of stocks of a listed company, you are considered a stockholder of the company.

There are three major participants in a stock market, the companies, the stock exchange and the investors. 

The companies enlist in the stock market so they can source out needed funds for their expansion or debt reduction.

The stock exchange is the intermediary center where companies and potential investors are brought together.   The stock exchange has member stock brokers who are the ones that handle the transactions of investors who want to buy or sell a share from a listed company.  In the Philippines, there is only one stock exchange and that is the Philippines Stock Exchange (PSE).  There are plenty of stock brokers listed in the Philippines Stock Exchange, there are conventional ones and there are the on-line stock brokers.  In order to participate in the stock market, an investor should tap the services of a stock broker.  In my case, I tapped the services of an on-line stock broker and that is the Citiseconline.  For a complete list of stockbrokers or trading participants, you can check the PSE website.

The investors are the people who want to invest their money on companies they feel will be doing well.  This is where, we, the ordinary people belong once we decided to buy shares of companies listed in the stock exchange.

That's all for now and I hope you learn something from this post.

Thank you for passing by and God bless everyone.