Ex-dividend date and impact on stock price

[pavilion103]

I haven't spent a lot of time reading up on dividends and the impact on stock price. The reason that I ask is because in one of my subscriptions "The Chartist" they have moved their trailing stops a few times in recent weeks due to ex-dividend date.

I am very ignorant when it comes to this side of things so any help would be very much appreciated.

 

[burglar]

I haven't spent a lot of time reading up on dividends and the impact on stock price. The reason that I ask is because in one of my subscriptions "The Chartist" they have moved their trailing stops a few times in recent weeks due to ex-dividend date.

I am very ignorant when it comes to this side of things so any help would be very much appreciated.

I feel your pain. Having never stayed in a company long enough to get a dividend, the nuances confound me.
I have tried to learn (for future use), there are many threads here to help you or further confuse you.

 

[skc]

I haven't spent a lot of time reading up on dividends and the impact on stock price. The reason that I ask is because in one of my subscriptions "The Chartist" they have moved their trailing stops a few times in recent weeks due to ex-dividend date.

I am very ignorant when it comes to this side of things so any help would be very much appreciated.

All else being equal, the share price "should" fall by the dividend amount on ex-dividend day.

Some people move their trailling stop away from the price by the same amount to take that into account. The theory goes that it's not really a issue with the share price chart that the stock dropped X%... it's simply the market adjusting for the dividend for the right reason.

In reality, all sorts of funny things happen on ex-div date, due to how various brokers deal with orders over this time. Have a look at the open of RHC which goes ex div this morning. It was all over the shop to say the least.

 

[pavilion103]

Yes, I searched for a thread and many showed up. I was hoping someone would have some sort of a concise answer to this specific point rather than me having to scroll through a bunch of threads.

Although I'm sure there is much useful information in those threads also.

 

[pavilion103]

All else being equal, the share price "should" fall by the dividend amount on ex-dividend day.

Some people move their trailling stop away from the price by the same amount to take that into account. The theory goes that it's not really a issue with the share price chart that the stock dropped X%... it's simply the market adjusting for the dividend for the right reason.

In reality, all sorts of funny things happen on ex-div date, due to how various brokers deal with orders over this time. Have a look at the open of RHC which goes ex div this morning. It was all over the shop to say the least.

This bolded part is what I was looking for. Not that it's the be all and end all answer, but that it explains why some people move their trailing stops in this manner.

My problem was that I'm looking at the charts and thinking that moving the stop well below a certain support doesn't make sense from the technical analysis point of view. It just looks weird to me. But it makes sense what you say.

Are the dividend dates of the stocks outlined on the ASX website. How early are these dates announced?

 

[skc]

This bolded part is what I was looking for. Not that it's the be all and end all answer, but that it explains why some people move their trailing stops in this manner.

My problem was that I'm looking at the charts and thinking that moving the stop well below a certain support doesn't make sense from the technical analysis point of view. It just looks weird to me. But it makes sense what you say.

Are the dividend dates of the stocks outlined on the ASX website. How early are these dates announced?

Ex-div dates on ASX website or many many sources on the internet. They are announced as soon as the dividend itself is announced which is usually around reporting dates.

Frankly I am surprised you don't know the most basic about how dividend works. You have been studying the market and charts for some time and it may be worthwhile to devote some time to know the rules governing the market. They are there black and white and are really important to every trader imo.

Know the rules, then observe how prices behave around those rules and you can then integrate such knowledge into your trading, or find new ways to trade.

 

[pavilion103]

I think it's because I started off trading stocks under 10c and now that I have been trading more between $1.00 and $10.00 I'm having to take these things into consideration.

It was exactly those sentiments that prompted me to start this thread. I feel that I need a much greater grasp on the broader picture. Thanks for the input.

 

[pixel]

I think it's because I started off trading stocks under 10c and now that I have been trading more between $1.00 and $10.00 I'm having to take these things into consideration.

It was exactly those sentiments that prompted me to start this thread. I feel that I need a much greater grasp on the broader picture. Thanks for the input.

If you check http://www.asx.com.au/asx/markets/dividends.do for any particular share you might be interested in, you'll find at least one year's worth of ex-div dates (provided they have paid a divi the past 12 to 18 months.)
Some broker programs, e.g. Paritech's Pulse that I use, will show you a much longer list.

Armed with that information, if shouldn't be too difficult to (a) figure out when the next one, if any, should be due, and (b) look up on a chart what happened on previous occasions.

 

[pavilion103]

If you check http://www.asx.com.au/asx/markets/dividends.do for any particular share you might be interested in, you'll find at least one year's worth of ex-div dates (provided they have paid a divi the past 12 to 18 months.)
Some broker programs, e.g. Paritech's Pulse that I use, will show you a much longer list.

Armed with that information, if shouldn't be too difficult to (a) figure out when the next one, if any, should be due, and (b) look up on a chart what happened on previous occasions.

Thank you very much. I'll check it out now.

 

[pixel]

I'm running my own. Let's see if I can attach an Excel spreadsheet.
It has two sheets: Upcoming ex-div dates and past (up to 2 years) of dividends.
As I ran it this morning, the last share prices are included and used to provide "Yield" of the latest dividend. Where the last dividend was a half-yearly one, the yield is obviously half-yearly as well. But it's the closest relative value that can be obtained in an automated approach.

View attachment ExDiv 05-03-13.xls

 

[Country Lad]

...........(b) look up on a chart what happened on previous occasions.

To make sense of what happens you also need to know what the market did on that day and what the particular company's peers also did close to your company's ex div date.

You may well find when looking at the history, that on the ex div date, the share price went up or dropped far more than the equivalent dividend. Also take into account the franking.

I take the amount of a dividend into account but my predominate focus is on the market sentiment at the time, how the market is treating similar companies or their index, and how the particular share moves. This will give me a more accurate assessment of how the market is going to treat the company in the short term.

I'm running my own. Let's see if I can attach an Excel spreadsheet.
It has two sheets: Upcoming ex-div dates and past (up to 2 years) of dividends.
As I ran it this morning, the last share prices are included and used to provide "Yield" of the latest dividend. Where the last dividend was a half-yearly one, the yield is obviously half-yearly as well. But it's the closest relative value that can be obtained in an automated approach.

As you said earlier,

Some broker programs, e.g. Paritech's Pulse that I use, will show you a much longer list.

give this information and a lot more. I use Pulse - saves having to do the work myself.

Cheers
Country Lad

 

[sydboy007]

I've notcied with the strong upswing since Nov 12 that some of the high yielding shares I've got in my SMSF have generally barely budged after going ex div. I think only AAD fell close to the dividend amount.

Low interest rates, the hunt for yield, increasing PEs are all factors starting to change the way the market works compared to a year or two ago