RE:RE:BIR or PEY?Hi
I've been doing something similar. Buying just before the ex div so I get the div and selling once I'm on day of tecord so I get the div.
I was successful for the most part but you have to be aware the price will drop usually the same or greater than what the div is.
So rather than hold a stock for the 3 month I would only hold it for about a month max waiting for the price to come back up to my purchase price.
It's called "dividend capture" and it does work but you have to pick the right stocks to do it with or you could end up holding it for a while waiting for the price to come back up.
So I thought.,.. what if I bought the stock short just before the ex div date and then waited for the price to drop therefore id get the div as well as I'd make money shorting it.
I'm not sure about this but I've heard that if you own a stock short that when the day of record happens and your on it your have to pay the div amount therefore it's not worth doing that if that's true.
But put simply, yes you can make more money doing the dividend capture thing but not by shorting it with the original purchase if having to repay the div amount is true.
Does anyone know if that's the case as it just would seem too easy doing the shorting thing?
Lastly where I figured out that div capture does work rather than holding a stock for the 3 months which does allow you to continue on doing the same thing with your money during that 3 month period in reality if it's a good stock with the right pattern you may still hold it for about a month but that's still better than waiting for the 3 months to get the div.
Does that make any sense?