Options

Ex-Dividend Date (Ex-div)

The ex-dividend date is the first trading day on which a buyer of a stock or ETF is no longer entitled to the announced dividend. Absent other influences, the theoretical price drops by roughly the dividend on that day.

Calculation and mechanics

Anyone who wants to receive the dividend must own the stock or ETF before the ex-dividend date. Anyone who buys on the ex-date no longer receives the announced distribution.

For ETFs with regular distributions, upcoming ex-dates can be estimated from the past rhythm. Data providers such as IBKR can supply a projected date and a projected amount. Both can still change until the official announcement.

Distinction

The ex-date concerns the underlying, the expiration the option contract. For sellers of American-style calls the date matters in particular: if a call is in the money on the day before the ex-date and the expected dividend exceeds the remaining time value, early exercise can be attractive for the holder. That raises the risk of an assignment.

Related terms

All terms in the glossary

All market and analytical information is provided for educational and analytical purposes only and does not constitute investment advice or a trading recommendation.