How to use the ex-dividend calculator
Price adjustment shows where the shares should open on the ex-date. Dividend capture tests a trade that buys before the ex-date and sells after it.
- Price and dividend. Enter the last close before the ex-date and the dividend per share for this single payment, not the annual total. Add the payments per year if you want the annual yield.
- For a capture trade, enter the number of shares, your buy price and the price you expect to sell at on or after the ex-date. The default assumes the price falls by exactly the dividend.
- Commissions for both trades together. Enter 0 for a zero-commission broker.
- Tax rate on the dividend. A capture trade almost never meets the holding period for qualified dividends, so use your ordinary income tax rate in a taxable account, or 0 in an IRA.
- Tax on the price change is optional; use it only if a loss would offset other short-term gains.
The capture chart and table show the after-tax result at sell prices around the expected drop.
The formulas
Expected drop = Dividend ÷ Previous closeThe previous close is the last closing price before the ex-dividend date.
A worked example
A stock closes at $80 the day before it goes ex-dividend, with a quarterly dividend of $0.60. It should open around $79.40, a drop of 0.75%. Holders at the close receive the dividend, so their total value is unchanged.
Now suppose you buy 500 shares at $80 just before the ex-date and sell at $79.40 afterwards. You collect $300.00 in dividends but lose $300.00 on the shares. Before tax you break even. The 24% tax on the dividend costs $72.00, so the trade ends at -$72.00.
Record date and ex-date under T+1
A company announces a declaration date, an ex-dividend date, a record date and a payment date. The record date is when the registrar takes the list of shareholders; because trades take time to settle, the market sets an ex-date to decide which trades count.
Since May 2024, US stock trades settle one business day after the trade (T+1). A buyer on the day before the record date settles on the record date, so they are on the list. That makes the ex-date and the record date usually the same business day: buying on that day is too late, buying the day before is enough. Under the old T+2 cycle, the ex-date came one business day before the record date.
Why dividend capture rarely pays
The price drop does most of the damage. If the shares fall by exactly the dividend, the trade breaks even before costs, and everything after that is negative:
| Sell price after the ex-date | Result before tax | Result after tax |
|---|---|---|
| $79.60 (dropped less than the dividend) | $100.00 | $28.00 |
| $79.40 (dropped by the dividend) | $0.00 | -$72.00 |
| $79.20 (dropped more than the dividend) | -$100.00 | -$172.00 |
Tax is the second problem. To be qualified, a dividend requires a holding of more than 60 days in the 121-day period around the ex-date, so a capture trade’s dividend is taxed at your ordinary rate. In an IRA there is no tax and the default trade ends at $0.00, but it still gains nothing. In the taxable account, $10 of commissions deepens the loss to -$82.00.
On some days the shares fall by less than the dividend, as in the first row, but that is not something you can count on in advance, and spreads and tax eat into any gap. Our dividend tax calculator explains the qualified dividend rules in more detail.
What this calculator does not include
- Market moves. On any given day, news and the broader market can move the price far more than the dividend.
- Bid-ask spread. Buying at the ask and selling at the bid adds a cost not captured unless you enter real fill prices.
- Options and short positions. A short seller owes the dividend to the lender; option prices already reflect expected dividends.
- Wash sales, which can change how a loss on the shares is treated for tax.