I'm not claiming that this would be a good idea or even profitable, but technically speaking, I assume that somebody could buy some shares of AAPL on Monday, May 12 at 3:59 PM, and then dump all those shares on Tuesday, May 13 at 6:01 AM, and still receive the dividend? Is that correct?
The times listed are EST.
you forgot about commissions to buy and sell the stock. Go run some numbers to find out what the real benefit would be. It's not worth it. Your broker might cancel your account for this type of behavior.
[B][I][SIZE=5][COLOR=#c09]Yesterday AAPL closed at $592.33 (-2.08) 2DAYS CONSECTIVE LOSS.[/COLOR][/SIZE][/I][/B]
[B][I][SIZE=5][COLOR=blue]Are YOU READY [/COLOR][/SIZE][/I][/B][B][I][SIZE=5][COLOR=#f09]to FILE A CLASS ACTION SUIT Against NASD, NASD Regulation, Nasdaq Stock Market and Against ALL Those Concerned with " Manipulating Market ", " Fraud Transactions " and " Runaway EXPLOITATION " Relating to AAPL out of Market[/COLOR][/SIZE][/I][/B] [B][I][SIZE=5][COLOR=blue]?[/COLOR][/SIZE][/I][/B]
[B][I][SIZE=5][COLOR=red]5 Reasons[/SIZE][/I][/B][B][I][SIZE=5][COLOR=#39c] All The AAPL Owners Have to Make Up His Mind to File A Class Action Suit.[/COLOR][/SIZE][/I][/B]
[B][I][SIZE=4]1. Let Alone So-Called " Front Running EXPLOITATION ", Activities of HIGH FREQUENCY TRADERS on Current Market, Such As " Getco " and " Night Capital ", Obviously Seem to Contain ILLEGAL ACTS, As Michael Lewis Pointed Out in His Latest Book " FLASH BOYS : A Wall Street REVOLT ", though That Has Long Been Common Perception Among Those who Are Engaged in Market Business.[/SIZE][/I][/B]
[B][I][SIZE=4]2. We, AAPL Stock Owners All Over The World, Have The Proper Right to Demand The Compensation for Otherwise Gained Huge Profits in These More Than 24 Months Since 2012 Without VILLAIN's Malicious Wrongdoings.[/SIZE][/I][/B]
[B][SIZE=4][I]3. We CAN'T BE HAPPY AT ALL Just Because AAPL Temporarily Recovered $600( Soon Slipped Out of It NOW ), Miserably Hovering Around Such Price Range, WAY $100 BELOW AAPL's All Time High $700. Since AAPL Hit All Time High in 2012, No Proper Reason Has Existed AT ALL to Plunge in Such Hideous Way in The First Place. Apparently AAPL Has Been Manipulated Since THEN. In Order For VILLAIN to Cover Up and Justify Their Wrongdoings, They Have Been Circulating INTENTIONAL CONTORTED SPECULATION " Apple is Doomed Because of THIS, Because of THAT, BLAH, BLAH, BLAH Which Has Been Completely Bogus FABRICATION ". Circulating " Demagogue & Propaganda " is VILLAIN's CONVENTIONAL TOOL.[/I][/SIZE][/B]
[B][SIZE=4][I]4. Temporary Recovery of $600 Doesn't Mean VILLAIN's Manipulation on AAPL Has Stopped for Good AT ALL ! They Can Overturn The Table ANYTIME WHEN THEY WANT. Despite that Just Like Today, Many Analysts & Pundits Predicted AAPL Would Hit $1.000 Soon, Then They Withdrew What They Themselves Said SHAMEFULLY & SHAMELESSLY As If They Had Said NOTHING After VILLAIN's Scheme Has Been Invoked ![/I][/SIZE][/B]
[B][SIZE=4][I]5. We're in ILLUSION Where Free Healthy Market Still Works and Exists. BUT NO MORE ! Current " Algorithm Trading " Makes Trades & Transactions MORE & MORE INVISIBLE, Hardly Possible to Tell " WHAT'S GOING ON IN BACK YARD ". We Need to KNOW " ENTITY of TRANSACTIONS ". We Need to Demand Them ( NASD & High Frequency Traders ) to Reveal and Disclose EVERYTHING ![/I][/SIZE][/B]
I'm not claiming that this would be a good idea or even profitable, but technically speaking, I assume that somebody could buy some shares of AAPL on Monday, May 12 at 3:59 PM, and then dump all those shares on Tuesday, May 13 at 6:01 AM, and still receive the dividend? Is that correct?
The times listed are EST.
Yes, but with two issues:
(1) ex-div occurs at midnight, so you can even buy your shares after 4 PM EST, making use of after-market. Then you can sell in the pre-market. Things will fluctuate rapidly before close of after hours and after open of pre-market, so if you use YOUR times, your milage may vary.
(2) at midnight the price resets down by the $3.29 per share, so you would be counting on it rising a little bit in order to get a profit. Others may be trying the same thing, so if you don't pull the trigger immediately at open of pre-market, you may find yourself underwater. Usually the price does work its way back up eventually, but you can't count on it being immediate. And if some bad news hits before it gets back up, well you may have wasted your time (or even lost money).
The bottom line is that even though your scheme has potential, it is not clear that you would be able to pull it off, nor that it would be worth the trouble if you managed to score a dime per share. Gaming or timing the stock market is basically a fool's errand (IMO).
I think technically you are correct, but it doesn't really work that way. I think the trade takes 3days to settle before you're the "shareholder of record." And in any event, the shares will open down by about the dividend amount after it's paid.
Nope, the original poster was correct. It is true that there are three days to make you the shareholder of record, but you don't have to hold them throughout that period to get recorded as such. You can jettison anytime after midnight that starts the ex-div day.
Overall it's more complex than I'll make it out to be here but the general rule that will apply to everyone(?) on this forum is that you need to purchase the stock 3 days before the record date in order to get counted for that payout. In this case the record date is May 12th so you'd have to buy before the close of the market on May 6th. After the close of business on May 12th you could then sell your shares and still get a dividend payout.
Everything you said is true except the last sentence. You DO NOT have to hold the shares throughout the T+3 days that it takes to record the transaction. Your sale will also take T+3 days to record. You can buy before midnight in any open market (meaning including after-hours) and then sell after midnight in any open market (meaning premarket) on ex-div day.
Not that it would do any good, for reasons that others have mentioned (the price resets down).
you forgot about commissions to buy and sell the stock. Go run some numbers to find out what the real benefit would be. It's not worth it. Your broker might cancel your account for this type of behavior.
Commission are only $7 each way (for my brokerage firm), so $14 to buy and sell a stock roundtrip, not exactly a huge sum.
I can also trade as often as I like. They won't cancel my account, since I've already been flagged as a daytrader, even though I don't trade every day, but I violated the rules in the past, so I am still designated as a daytrader. Everytime I trade, they make money from me, so they're happy if I trade as often as I can. The more, the better.
The last time I bought AAPL, I think that I held it for 20 minutes. I've bought and sold other stocks and held them for only a minute or two sometimes.
No, not really. All else equal, you would have paid $3.29 more for it (perhaps adjusted for some personal tax effects).
If it recovers in full to the price you paid AND you have an extra $3.29 in your pocket come May 15th, then that's a win.
Thompson
I am afraid you're making it sound like there's a free lunch in this situation. There is none.
If you bought the stock before it went ex-D, you would have paid (about) $3.29 more for it, so that you could get the $3.29 in dividends. Say, the ex-D price of Apple was $596.69. You would have paid $600 for it before it went ex-D. The $600 you paid -- in the absence of any other information or events -- gets you an ex-D stock price of $596.69 + dividends of $3.29 = $600. (Again, I am abstracting from personal tax effects).
If the stock 'recovered' (whatever that means!), it would have done so for reasons of other information or events. Let's say it went up by $5. In the absence of dividends, Apple would have traded at $605 because of the event. Ex-D, it trades at $601.69 (which is higher than the $600 you paid for it before it went ex-D), but it is no different from $605 = $596.69 (ex-D price) + $3.29 (dividend) + $5 (event effect).
There is no arbitrage opportunity here, in other words.
PS: Note that the same logic applies if the stock went down by $5.
(1) ex-div occurs at midnight, so you can even buy your shares after 4 PM EST, making use of after-market. Then you can sell in the pre-market. Things will fluctuate rapidly before close of after hours and after open of pre-market, so if you use YOUR times, your milage may vary.
(2) at midnight the price resets down by the $3.29 per share, so you would be counting on it rising a little bit in order to get a profit. Others may be trying the same thing, so if you don't pull the trigger immediately at open of pre-market, you may find yourself underwater. Usually the price does work its way back up eventually, but you can't count on it being immediate. And if some bad news hits before it gets back up, well you may have wasted your time (or even lost money).
The bottom line is that even though your scheme has potential, it is not clear that you would be able to pull it off, nor that it would be worth the trouble if you managed to score a dime per share. Gaming or timing the stock market is basically a fool's errand (IMO).
Thompson
Thanks for the info. I've always had a fuzzy understanding about dividends and dividend dates, but I understand it a lot better now after this thread.
Commission are only $7 each way (for my brokerage firm), so $14 to buy and sell a stock roundtrip, not exactly a huge sum.
I can also trade as often as I like. They won't cancel my account, since I've already been flagged as a daytrader, even though I don't trade every day, but I violated the rules in the past, so I am still designated as a daytrader. Everytime I trade, they make money from me, so they're happy if I trade as often as I can. The more, the better.
The last time I bought AAPL, I think that I held it for 20 minutes. I've bought and sold other stocks and held them for only a minute or two sometimes.
Do you have an actual person that manages your portfolio or are you going through the discount brokers? I've used both in the past, the discount shops sure, but the brokers that actually have professionals that help manage your finances will many times charge much more than that because they have seasoned trained professionals, not someone they pulled off the street and had them go through the Series 6 and 7 exams. Some brokers actually have legitimate college degrees and take their line of work seriously and the schlock houses don't always have that.
So it sounds like you are a day trader. Sorry, I stay away from those types of investors. Sorry... Please don't respond to my comments anymore.
Do you have an actual person that manages your portfolio or are you going through the discount brokers? I've used both in the past, the discount shops sure, but the brokers that actually have professionals that help manage your finances will many times charge much more than that because they have seasoned trained professionals, not someone they pulled off the street and had them go through the Series 6 and 7 exams. Some brokers actually have legitimate college degrees and take their line of work seriously and the schlock houses don't always have that.
So it sounds like you are a day trader. Sorry, I stay away from those types of investors. Sorry... Please don't respond to my comments anymore.
Thank you.
No, there's no person managing any accounts of mine. I use a discount broker (scottrade), and I do everything myself. I like to make my own decisions. If things go wrong, then there's nobody to blame but myself, and if I do good on a trade, I can pat myself on my own back.
And yes, I am classified as a day trader, I'm not an investor. I see the stock market as a big poker game. I used to play a lot of poker, now I play stocks instead for my own entertainment and enjoyment.
And you responded to my comment before I responded to yours, so if you don't want any more responses to your comments, then don't ever comment on anything that I write, and you will get your wish.
No, there's no person managing any accounts of mine. I use a discount broker (scottrade), and I do everything myself. I like to make my own decisions. If things go wrong, then there's nobody to blame but myself, and if I do good on a trade, I can pat myself on my own back.
And yes, I am classified as a day trader, I'm not an investor. I see the stock market as a big poker game. I used to play a lot of poker, now I play stocks instead for my own entertainment and enjoyment.
Maybe you should gamble in Vegas, that's where you find more people like yourself. I don't like taking advice from Day Traders.
I am afraid you're making it sound like there's a free lunch in this situation. There is none.
If you bought the stock before it went ex-D, you would have paid (about) $3.29 more for it, so that you could get the $3.29 in dividends. Say, the ex-D price of Apple was $596.69. You would have paid $600 for it before it went ex-D. The $600 you paid -- in the absence of any other information or events -- gets you an ex-D stock price of $596.69 + dividends of $3.29 = $600. (Again, I am abstracting from personal tax effects).
If the stock 'recovered' (whatever that means!), it would have done so for reasons of other information or events. Let's say it went up by $5. In the absence of dividends, Apple would have traded at $605 because of the event. Ex-D, it trades at $601.69 (which is higher than the $600 you paid for it before it went ex-D), but it is no different from $605 = $596.69 (ex-D price) + $3.29 (dividend) + $5 (event effect).
There is no arbitrage opportunity here, in other words.
PS: Note that the same logic applies if the stock went down by $5.
I never said it was a free lunch. I'm just cheering the virtual up day, but not saying that the dividend caused it. See my other posts on this thread.
To your point, if the dividend had never happened, then whatever news caused this increase would have brought us up an equivalent amount (above the hypothetical $600 amount) anyway, so the dividend didn't really figure in either way.
I think the poster you responded to was just happy to see the stock recover so quickly. And (s)he likes cash in pocket. Sure, if the dividend had never happened, then Apple would be up and (s)he could have sold, say, one half of one percent of their position (or whatever it works out to at these numbers) to end up with the same amount of cash in pocket and value of their position. But some people want to get some cash without decreasing their share count.
Personally, I always reinvest my AAPL dividends instead of taking the cash, so it really doesn't matter to me either way. But I do I like increasing my position over time, because I believe that AAPL's best days are still ahead. The dividend will do better as shares than in my grubby hands. And if Apple keeps buying back shares and shredding them while I keep buying more bit by bit, then I end up with a larger fraction of the pie for me. Yummy!
I wasn't giving out any advice to anybody here. I was asking a question.
And I am actually a successful gambler. When online poker was still legal in the US, I was quite profitable.
I use game theory, statistics, math and psychology to win at poker, and I try to apply many of the same techniques to my stock trading.
You trade however you want, and I'll trade however I want.
Playing the stock market is a little different than gambling in a poker game. There's no bluffing in the stock market. You can't apply game theory in playing the stock market since you aren't looking at your opponents. All you are doing is looking at trends and some statistical probability, but do you run SAS or some other predictive analytics application when you decide what and when to buy?
If you want to play Liar's Dice, I'm always up for a rousing game, but I don't cheat and look at my own dice while I play the game. :-)
Playing the stock market is a little different than gambling in a poker game. There's no bluffing in the stock market. You can't apply game theory in playing the stock market since you aren't looking at your opponents. All you are doing is looking at trends and some statistical probability, but do you run SAS or some other predictive analytics application when you decide what and when to buy?
Yes, of course it's a bit different than playing a game of poker, but I still notice many similarities.
It's true that you can not see your opponents, but you do know who they are at least. There are other retail investors, there are big institutional investors and there are the MM's.
I used to get mad when I first started trading stocks when a stock did something unpredictable or unexpected, but I don't get surprised or mad anymore, and I just chalk it up to being part of the game.
I try to base my decisions by looking at charts and following trends, and being aware of various support and resistance levels. I also try to take into account any current political or economic events. I am hoping that Russia invades the Ukraine, because those sorts of events can really move the entire market a lot, and I would try and take big time advantage of it, whenever an opportunity like that comes along. When the US govt shut down last year, that was awesome, so many opportunities to get certain stocks for cheap, or to do a bit of shorting, when certain stocks are collapsing.
I try to combine all of those things and read the charts realtime as they are happening. That is of course not easy, but I'm getting better at it. Some people use monthly or daily charts, the charts I look at are usually 1 minute, 3 minute and 5 minute when I'm trading.
Yes, of course it's a bit different than playing a game of poker, but I still notice many similarities.
It's true that you can not see your opponents, but you do know who they are at least. There are other retail investors, there are big institutional investors and there are the MM's.
I used to get mad when I first started trading stocks when a stock did something unpredictable or unexpected, but I don't get surprised or mad anymore, and I just chalk it up to being part of the game.
I try to base my decisions by looking at charts and following trends, and being aware of various support and resistance levels. I also try to take into account any current political or economic events. I am hoping that Russia invades the Ukraine, because those sorts of events can really move the entire market a lot, and I would try and take big time advantage of it, whenever an opportunity like that comes along. When the US govt shutdown last year, that was awesome, so many opportunities.
I try to combine all of those things and read the charts realtime as they are happening. That is of course not easy, but I'm getting better at it. Some people use monthly or daily charts, the charts I look at are usually 1 minute, 3 minute and 5 minute when I'm trading.
The Government shutting down at this point is not something to desire. Russia invading the Ukraine is also something I don't desire either.
Well, the weather and geological conditions can effect the market. Tsunamis, large earthquakes, hurricanes, etc.
So, do you think Apple stock is going to go up or down the day the split happens? My gut feeling is its going to go down due to some selling off portions of their holdings since it's had a fairly large run up and this way people can just sell off a portion of their withholdings to get some of their money out. I've seen that happen many times before when there was a stock split.
Comments
I'm not claiming that this would be a good idea or even profitable, but technically speaking, I assume that somebody could buy some shares of AAPL on Monday, May 12 at 3:59 PM, and then dump all those shares on Tuesday, May 13 at 6:01 AM, and still receive the dividend? Is that correct?
The times listed are EST.
you forgot about commissions to buy and sell the stock. Go run some numbers to find out what the real benefit would be. It's not worth it. Your broker might cancel your account for this type of behavior.
The opposite, in fact.
You have no clue about brokers, do you?
[B][I][SIZE=5][COLOR=blue]Are YOU READY [/COLOR][/SIZE][/I][/B][B][I][SIZE=5][COLOR=#f09]to FILE A CLASS ACTION SUIT Against NASD, NASD Regulation, Nasdaq Stock Market and Against ALL Those Concerned with " Manipulating Market ", " Fraud Transactions " and " Runaway EXPLOITATION " Relating to AAPL out of Market[/COLOR][/SIZE][/I][/B] [B][I][SIZE=5][COLOR=blue]?[/COLOR][/SIZE][/I][/B]
[B][I][SIZE=5][COLOR=red]5 Reasons[/SIZE][/I][/B][B][I][SIZE=5][COLOR=#39c] All The AAPL Owners Have to Make Up His Mind to File A Class Action Suit.[/COLOR][/SIZE][/I][/B]
[B][I][SIZE=4]1. Let Alone So-Called " Front Running EXPLOITATION ", Activities of HIGH FREQUENCY TRADERS on Current Market, Such As " Getco " and " Night Capital ", Obviously Seem to Contain ILLEGAL ACTS, As Michael Lewis Pointed Out in His Latest Book " FLASH BOYS : A Wall Street REVOLT ", though That Has Long Been Common Perception Among Those who Are Engaged in Market Business.[/SIZE][/I][/B]
[B][I][SIZE=4]2. We, AAPL Stock Owners All Over The World, Have The Proper Right to Demand The Compensation for Otherwise Gained Huge Profits in These More Than 24 Months Since 2012 Without VILLAIN's Malicious Wrongdoings.[/SIZE][/I][/B]
[IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/42847/width/500/height/1000[/IMG]
[IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/42848/width/500/height/1000[/IMG]
[IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/42849/width/500/height/1000[/IMG]
[B][SIZE=4][I]3. We CAN'T BE HAPPY AT ALL Just Because AAPL Temporarily Recovered $600( Soon Slipped Out of It NOW ), Miserably Hovering Around Such Price Range, WAY $100 BELOW AAPL's All Time High $700. Since AAPL Hit All Time High in 2012, No Proper Reason Has Existed AT ALL to Plunge in Such Hideous Way in The First Place. Apparently AAPL Has Been Manipulated Since THEN. In Order For VILLAIN to Cover Up and Justify Their Wrongdoings, They Have Been Circulating INTENTIONAL CONTORTED SPECULATION " Apple is Doomed Because of THIS, Because of THAT, BLAH, BLAH, BLAH Which Has Been Completely Bogus FABRICATION ".
Circulating " Demagogue & Propaganda " is VILLAIN's CONVENTIONAL TOOL.[/I][/SIZE][/B]
[B][SIZE=4][I]4. Temporary Recovery of $600 Doesn't Mean VILLAIN's Manipulation on AAPL Has Stopped for Good AT ALL ! They Can Overturn The Table ANYTIME WHEN THEY WANT.
Despite that Just Like Today, Many Analysts & Pundits Predicted AAPL Would Hit $1.000 Soon, Then They Withdrew What They Themselves Said SHAMEFULLY & SHAMELESSLY As If They Had Said NOTHING After VILLAIN's Scheme Has Been Invoked ![/I][/SIZE][/B]
[B][SIZE=4][I]5. We're in ILLUSION Where Free Healthy Market Still Works and Exists. BUT NO MORE !
Current " Algorithm Trading " Makes Trades & Transactions MORE & MORE INVISIBLE, Hardly Possible to Tell " WHAT'S GOING ON IN BACK YARD ".
We Need to KNOW " ENTITY of TRANSACTIONS ".
We Need to Demand Them ( NASD & High Frequency Traders ) to Reveal and Disclose EVERYTHING ![/I][/SIZE][/B]
Actually looks like the stock will recover the full $3.29 today. Nice.
Free dividend for anyone who bought yesterday
No, not really. All else equal, you would have paid $3.29 more for it (perhaps adjusted for some personal tax effects).
I'm not claiming that this would be a good idea or even profitable, but technically speaking, I assume that somebody could buy some shares of AAPL on Monday, May 12 at 3:59 PM, and then dump all those shares on Tuesday, May 13 at 6:01 AM, and still receive the dividend? Is that correct?
The times listed are EST.
Yes, but with two issues:
(1) ex-div occurs at midnight, so you can even buy your shares after 4 PM EST, making use of after-market. Then you can sell in the pre-market. Things will fluctuate rapidly before close of after hours and after open of pre-market, so if you use YOUR times, your milage may vary.
(2) at midnight the price resets down by the $3.29 per share, so you would be counting on it rising a little bit in order to get a profit. Others may be trying the same thing, so if you don't pull the trigger immediately at open of pre-market, you may find yourself underwater. Usually the price does work its way back up eventually, but you can't count on it being immediate. And if some bad news hits before it gets back up, well you may have wasted your time (or even lost money).
The bottom line is that even though your scheme has potential, it is not clear that you would be able to pull it off, nor that it would be worth the trouble if you managed to score a dime per share. Gaming or timing the stock market is basically a fool's errand (IMO).
Thompson
I think technically you are correct, but it doesn't really work that way. I think the trade takes 3days to settle before you're the "shareholder of record." And in any event, the shares will open down by about the dividend amount after it's paid.
Nope, the original poster was correct. It is true that there are three days to make you the shareholder of record, but you don't have to hold them throughout that period to get recorded as such. You can jettison anytime after midnight that starts the ex-div day.
Overall it's more complex than I'll make it out to be here but the general rule that will apply to everyone(?) on this forum is that you need to purchase the stock 3 days before the record date in order to get counted for that payout. In this case the record date is May 12th so you'd have to buy before the close of the market on May 6th. After the close of business on May 12th you could then sell your shares and still get a dividend payout.
edit: Corrected dates.
Everything you said is true except the last sentence. You DO NOT have to hold the shares throughout the T+3 days that it takes to record the transaction. Your sale will also take T+3 days to record. You can buy before midnight in any open market (meaning including after-hours) and then sell after midnight in any open market (meaning premarket) on ex-div day.
Not that it would do any good, for reasons that others have mentioned (the price resets down).
Thompson
No, not really. All else equal, you would have paid $3.29 more for it (perhaps adjusted for some personal tax effects).
If it recovers in full to the price you paid AND you have an extra $3.29 in your pocket come May 15th, then that's a win.
Thompson
The opposite, in fact.
You have no clue about brokers, do you?
Well, maybe we work with two different types of brokers. I like to work with those that give good advice and don't like people doing stupid things.
you forgot about commissions to buy and sell the stock. Go run some numbers to find out what the real benefit would be. It's not worth it. Your broker might cancel your account for this type of behavior.
Commission are only $7 each way (for my brokerage firm), so $14 to buy and sell a stock roundtrip, not exactly a huge sum.
I can also trade as often as I like. They won't cancel my account, since I've already been flagged as a daytrader, even though I don't trade every day, but I violated the rules in the past, so I am still designated as a daytrader. Everytime I trade, they make money from me, so they're happy if I trade as often as I can. The more, the better.
The last time I bought AAPL, I think that I held it for 20 minutes. I've bought and sold other stocks and held them for only a minute or two sometimes.
No, not really. All else equal, you would have paid $3.29 more for it (perhaps adjusted for some personal tax effects).
If it recovers in full to the price you paid AND you have an extra $3.29 in your pocket come May 15th, then that's a win.
Thompson
I am afraid you're making it sound like there's a free lunch in this situation. There is none.
If you bought the stock before it went ex-D, you would have paid (about) $3.29 more for it, so that you could get the $3.29 in dividends. Say, the ex-D price of Apple was $596.69. You would have paid $600 for it before it went ex-D. The $600 you paid -- in the absence of any other information or events -- gets you an ex-D stock price of $596.69 + dividends of $3.29 = $600. (Again, I am abstracting from personal tax effects).
If the stock 'recovered' (whatever that means!), it would have done so for reasons of other information or events. Let's say it went up by $5. In the absence of dividends, Apple would have traded at $605 because of the event. Ex-D, it trades at $601.69 (which is higher than the $600 you paid for it before it went ex-D), but it is no different from $605 = $596.69 (ex-D price) + $3.29 (dividend) + $5 (event effect).
There is no arbitrage opportunity here, in other words.
PS: Note that the same logic applies if the stock went down by $5.
Yes, but with two issues:
(1) ex-div occurs at midnight, so you can even buy your shares after 4 PM EST, making use of after-market. Then you can sell in the pre-market. Things will fluctuate rapidly before close of after hours and after open of pre-market, so if you use YOUR times, your milage may vary.
(2) at midnight the price resets down by the $3.29 per share, so you would be counting on it rising a little bit in order to get a profit. Others may be trying the same thing, so if you don't pull the trigger immediately at open of pre-market, you may find yourself underwater. Usually the price does work its way back up eventually, but you can't count on it being immediate. And if some bad news hits before it gets back up, well you may have wasted your time (or even lost money).
The bottom line is that even though your scheme has potential, it is not clear that you would be able to pull it off, nor that it would be worth the trouble if you managed to score a dime per share. Gaming or timing the stock market is basically a fool's errand (IMO).
Thompson
Thanks for the info. I've always had a fuzzy understanding about dividends and dividend dates, but I understand it a lot better now after this thread.
Commission are only $7 each way (for my brokerage firm), so $14 to buy and sell a stock roundtrip, not exactly a huge sum.
I can also trade as often as I like. They won't cancel my account, since I've already been flagged as a daytrader, even though I don't trade every day, but I violated the rules in the past, so I am still designated as a daytrader. Everytime I trade, they make money from me, so they're happy if I trade as often as I can. The more, the better.
The last time I bought AAPL, I think that I held it for 20 minutes. I've bought and sold other stocks and held them for only a minute or two sometimes.
Do you have an actual person that manages your portfolio or are you going through the discount brokers? I've used both in the past, the discount shops sure, but the brokers that actually have professionals that help manage your finances will many times charge much more than that because they have seasoned trained professionals, not someone they pulled off the street and had them go through the Series 6 and 7 exams. Some brokers actually have legitimate college degrees and take their line of work seriously and the schlock houses don't always have that.
So it sounds like you are a day trader. Sorry, I stay away from those types of investors. Sorry... Please don't respond to my comments anymore.
Thank you.
Do you have an actual person that manages your portfolio or are you going through the discount brokers? I've used both in the past, the discount shops sure, but the brokers that actually have professionals that help manage your finances will many times charge much more than that because they have seasoned trained professionals, not someone they pulled off the street and had them go through the Series 6 and 7 exams. Some brokers actually have legitimate college degrees and take their line of work seriously and the schlock houses don't always have that.
So it sounds like you are a day trader. Sorry, I stay away from those types of investors. Sorry... Please don't respond to my comments anymore.
Thank you.
No, there's no person managing any accounts of mine. I use a discount broker (scottrade), and I do everything myself. I like to make my own decisions. If things go wrong, then there's nobody to blame but myself, and if I do good on a trade, I can pat myself on my own back.
And yes, I am classified as a day trader, I'm not an investor. I see the stock market as a big poker game. I used to play a lot of poker, now I play stocks instead for my own entertainment and enjoyment.
And you responded to my comment before I responded to yours, so if you don't want any more responses to your comments, then don't ever comment on anything that I write, and you will get your wish.
No, there's no person managing any accounts of mine. I use a discount broker (scottrade), and I do everything myself. I like to make my own decisions. If things go wrong, then there's nobody to blame but myself, and if I do good on a trade, I can pat myself on my own back.
And yes, I am classified as a day trader, I'm not an investor. I see the stock market as a big poker game. I used to play a lot of poker, now I play stocks instead for my own entertainment and enjoyment.
Maybe you should gamble in Vegas, that's where you find more people like yourself. I don't like taking advice from Day Traders.
Maybe you should gamble in Vegas, that's where you find more people like yourself. I don't like taking advice from Day Traders.
I wasn't giving out any advice to anybody here. I was asking a question.
And I am actually a successful gambler. When online poker was still legal in the US, I was quite profitable.
I use game theory, statistics, math and psychology to win at poker, and I try to apply many of the same techniques to my stock trading.
You trade however you want, and I'll trade however I want.
I am afraid you're making it sound like there's a free lunch in this situation. There is none.
If you bought the stock before it went ex-D, you would have paid (about) $3.29 more for it, so that you could get the $3.29 in dividends. Say, the ex-D price of Apple was $596.69. You would have paid $600 for it before it went ex-D. The $600 you paid -- in the absence of any other information or events -- gets you an ex-D stock price of $596.69 + dividends of $3.29 = $600. (Again, I am abstracting from personal tax effects).
If the stock 'recovered' (whatever that means!), it would have done so for reasons of other information or events. Let's say it went up by $5. In the absence of dividends, Apple would have traded at $605 because of the event. Ex-D, it trades at $601.69 (which is higher than the $600 you paid for it before it went ex-D), but it is no different from $605 = $596.69 (ex-D price) + $3.29 (dividend) + $5 (event effect).
There is no arbitrage opportunity here, in other words.
PS: Note that the same logic applies if the stock went down by $5.
I never said it was a free lunch. I'm just cheering the virtual up day, but not saying that the dividend caused it. See my other posts on this thread.
To your point, if the dividend had never happened, then whatever news caused this increase would have brought us up an equivalent amount (above the hypothetical $600 amount) anyway, so the dividend didn't really figure in either way.
I think the poster you responded to was just happy to see the stock recover so quickly. And (s)he likes cash in pocket. Sure, if the dividend had never happened, then Apple would be up and (s)he could have sold, say, one half of one percent of their position (or whatever it works out to at these numbers) to end up with the same amount of cash in pocket and value of their position. But some people want to get some cash without decreasing their share count.
Personally, I always reinvest my AAPL dividends instead of taking the cash, so it really doesn't matter to me either way. But I do I like increasing my position over time, because I believe that AAPL's best days are still ahead. The dividend will do better as shares than in my grubby hands. And if Apple keeps buying back shares and shredding them while I keep buying more bit by bit, then I end up with a larger fraction of the pie for me. Yummy!
Thompson
I wasn't giving out any advice to anybody here. I was asking a question.
And I am actually a successful gambler. When online poker was still legal in the US, I was quite profitable.
I use game theory, statistics, math and psychology to win at poker, and I try to apply many of the same techniques to my stock trading.
You trade however you want, and I'll trade however I want.
Playing the stock market is a little different than gambling in a poker game. There's no bluffing in the stock market. You can't apply game theory in playing the stock market since you aren't looking at your opponents. All you are doing is looking at trends and some statistical probability, but do you run SAS or some other predictive analytics application when you decide what and when to buy?
If you want to play Liar's Dice, I'm always up for a rousing game, but I don't cheat and look at my own dice while I play the game. :-)
Playing the stock market is a little different than gambling in a poker game. There's no bluffing in the stock market. You can't apply game theory in playing the stock market since you aren't looking at your opponents. All you are doing is looking at trends and some statistical probability, but do you run SAS or some other predictive analytics application when you decide what and when to buy?
Yes, of course it's a bit different than playing a game of poker, but I still notice many similarities.
It's true that you can not see your opponents, but you do know who they are at least. There are other retail investors, there are big institutional investors and there are the MM's.
I used to get mad when I first started trading stocks when a stock did something unpredictable or unexpected, but I don't get surprised or mad anymore, and I just chalk it up to being part of the game.
I try to base my decisions by looking at charts and following trends, and being aware of various support and resistance levels. I also try to take into account any current political or economic events. I am hoping that Russia invades the Ukraine, because those sorts of events can really move the entire market a lot, and I would try and take big time advantage of it, whenever an opportunity like that comes along. When the US govt shut down last year, that was awesome, so many opportunities to get certain stocks for cheap, or to do a bit of shorting, when certain stocks are collapsing.
I try to combine all of those things and read the charts realtime as they are happening. That is of course not easy, but I'm getting better at it. Some people use monthly or daily charts, the charts I look at are usually 1 minute, 3 minute and 5 minute when I'm trading.
Yes, of course it's a bit different than playing a game of poker, but I still notice many similarities.
It's true that you can not see your opponents, but you do know who they are at least. There are other retail investors, there are big institutional investors and there are the MM's.
I used to get mad when I first started trading stocks when a stock did something unpredictable or unexpected, but I don't get surprised or mad anymore, and I just chalk it up to being part of the game.
I try to base my decisions by looking at charts and following trends, and being aware of various support and resistance levels. I also try to take into account any current political or economic events. I am hoping that Russia invades the Ukraine, because those sorts of events can really move the entire market a lot, and I would try and take big time advantage of it, whenever an opportunity like that comes along. When the US govt shutdown last year, that was awesome, so many opportunities.
I try to combine all of those things and read the charts realtime as they are happening. That is of course not easy, but I'm getting better at it. Some people use monthly or daily charts, the charts I look at are usually 1 minute, 3 minute and 5 minute when I'm trading.
The Government shutting down at this point is not something to desire. Russia invading the Ukraine is also something I don't desire either.
Well, the weather and geological conditions can effect the market. Tsunamis, large earthquakes, hurricanes, etc.
So, do you think Apple stock is going to go up or down the day the split happens? My gut feeling is its going to go down due to some selling off portions of their holdings since it's had a fairly large run up and this way people can just sell off a portion of their withholdings to get some of their money out. I've seen that happen many times before when there was a stock split.