Dividend trade roll/play(redirected from Dividend Trade Plays)
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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved