The ex-dividend date is the date by which you must own a stock to receive the next dividend payment. If you buy the stock on or after this date, you will not receive the upcoming dividend. The ex-dividend date is typically two business days before the record date. This date is important for investors planning to capture dividend payments.
Company ABC declares a quarterly dividend of $1 per share with an ex-dividend date of March 15. If you buy the stock on March 14, you will receive the $1 dividend because you own it before the ex-dividend date. If you buy on March 15 or later, you will not receive this dividend, though the stock price typically drops by about the dividend amount on the ex-dividend date.
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