Gains from Dividend Plays Possible?

Question

Does buying a stock before ex-dividend date and selling after make money? Or do price moves cancel the dividend gains? I understand the mechanics of when to buy and when to sell, I was wondering if the moves in the market price of the stock would cancel out whatever dividend you would receive.

Answer 1

The price will drop when a stock goes ex-d. I've never heard of a consistant trade whereby you can profit from before and on the ex-d date.

Answer 2

I think you are forgetting that there are thousands of us out here working full time in world of finance and investing.  We have every sort of hardware and software for sorting through every minute permeation of every tic in every trade around the entire world (price tag from $100k to $100mm).

These systems will automatically execute trades of any size and configuration that will result in a profitable trade.  More often than not these trades result from variations in trading price of less than one cent.

So, no...you are not going to find dollars just laying about on Wall Street for you to pick up at your leisure:  The Street, she's being strip mined for fractions of a penny every hour of every minute of every day by computers much faster and richer than you.

Your best bet (against these monsters) is to do well what they do poorly:  wait.  Time is their enemy.  Make it your friend.