Dividend Capture Strategy Explained: How It Actually Works (and When It Doesn't)

New here? Let's break down the basics of dividend capture.

The strategy is simple in concept: buy a stock before the ex-dividend date, collect the dividend, then sell. Rinse and repeat across multiple stocks throughout the year.

The key dates you need to know:

• Declaration date – company announces the dividend

• Ex-dividend date – buy before this to qualify for the dividend

• Record date – official ownership verification

• Payment date – cash hits your account

Here's what catches most beginners off guard: on the ex-dividend date, the stock price typically drops by roughly the dividend amount. So if you're collecting a $0.50 dividend, expect the share price to open about $0.50 lower.

This means pure dividend capture isn't free money. Your edge comes from timing volatility, selecting the right stocks, and managing transaction costs.

What got you interested in dividend capture? Drop your questions below.