Dividend Trade Roll/Play

Dividend trade roll/play

Used for listed equity securities. Method of buying and selling stocks around their ex-dividend dates so as to collect the dividend (which is 80% tax-exempt) offset by a fully-taxable capital loss. Predicated on the 80% current exemption that some corporations receive on dividend income.

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Dividend Trade Roll/Play

An investment practice in which an investor buys and sells shares near the ex-dividend date ? the date after which the next dividend belongs to the seller of the share, rather than the buyer. An advantage of dividend trade roll/play is the fact that dividends are 80% tax exempt with the remaining 20% offset by capital losses. The practice is only profitable if the investor is entitled to the normal 80% exemption on dividends.