Definition
Ex-Date
The ex-date is the cut-off day from which a stock trades without the right to an upcoming corporate action like a dividend, bonus, or split.
To receive a dividend, bonus, or other entitlement, you must own the share before the ex-date. Buy on or after the ex-date and the benefit goes to the seller. Because of T+1 settlement, the ex-date and record date in India now usually coincide.
On the ex-date, the share price typically drops by roughly the value of the benefit (for example, by the dividend amount), since new buyers no longer get it. The terms cum-date, ex-date, and record date together define entitlement timing.
Related terms
- Record DateThe record date is the date on which a company checks its books to decide who is eligible for a dividend, bonus, or other corporate action.
- Cum-DateCum-date refers to the period when a stock still trades 'with' the right to an upcoming dividend or corporate benefit.
- DividendA dividend is a portion of a company's profit distributed to shareholders, usually in cash and on a per-share basis.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.