dividend capture

Dividend capture

Dividend Capture

The practice of buying a stock before the ex-dividend date and selling immediately thereafter. The ex-dividend date is the date after which a dividend belongs by right to the seller, rather than the buyer, of a stock. Thus, dividend capture allows the investor to keep the dividend after selling the stock. An investor practicing dividend capture is only interested in a stock for the dividend it produces and therefore sells the stock as soon as he/she can retain the dividend.

dividend capture

The trading of a stock in order to be the holder of record for dividend payment purposes. Once the right to receive the dividend payment has been earned, the stock is sold. Dividend capture is practiced chiefly by corporations; they are permitted to exclude from their taxable income 80% of dividends received. Certain specific tax rules apply to dividend capture.
References in periodicals archive ?
For stocks in which dividend capture is too costly, PDRs may reflect the marginal tax rate of retail investors with longer holding periods.
The Fund also uses enhanced income strategies by engaging in dividend capture trading; option overwriting; and realization of gains on the sale of securities, dividend growth, and currency forwards.
The Fund also utilizes enhanced income strategies by engaging in dividend capture trading, option overwriting, and realization of gains on the sale of securities, dividend growth, and currency forwards.
Lummer, 1984, "The Cash Management Implications of a Hedged Dividend Capture Strategy", Financial Management, 13:7-17
However, this conclusion applies only to a carefully filtered sample of high-yield securities that are likely targets of corporate dividend capture after the introduction of negotiable commissions in May 1975.
Dividend capture by taxable corporations, which face lower taxes on dividend income than on capital gains, represents a special type of short-term trading.
It invests globally in dividend-paying or income-generating securities across multiple asset classes and also uses enhanced income strategies by engaging in dividend capture trading; option overwriting; and realisation of gains on the sale of securities, dividend growth and currency forwards.
A major use for nonstandard-settlement trades is dividend capture.
It invests globally in dividend-paying or income-generating securities across multiple asset classes and also uses improved income strategies by engaging in dividend capture trading; option overwriting; and realisation of gains on the sale of securities, dividend growth and currency forwards.
The marginal investors are short-term traders who generally practice dividend capture by buying high-dividend-yielding stocks cum-dividend and selling them ex-dividend.
The underlying stocks for which primes have been created are generally those of large firms with high dividend yields and listed options, making them good candidates for cum-ex trading, especially dividend capture strategies by incorporated entities.