FIRE'd@51
Thinks s/he gets paid by the post
- Joined
- Aug 28, 2006
- Messages
- 2,433
mathjak107 said:now as i always say the paying of the dividend itself is a zero sum event as the stock price by exchange rules must be adjusted downward by the same amount. what makes a dividend paying stock a good thing is when you get the dividend and the stock recovers from the drop and goes higher.
It's a zero sum game for an instant at the opening of trading on the day the stock goes ex-dividend. The specialist marks all the orders he has in his book from the previous day (buy & sell) down by the amount of the dividend to reflect the fact that the person who bought the stock the previous day gets the dividend and the one who buys on the ex-date does not.