When I buy a stock, does the trade have to settle before the record date in order to receive the dividend? For example, the record date for company XYZ is 3/14. I buy the stock on 3/12, but the trade doesn't settle until 3/17, am I eligible to receive the dividend?
The two dates that matter here are the trade date and the ex-dividend date. As long as the trade is made before the ex-dividend date you'll get the dividend. The settlement date and the record date don't explicitly factor in here and that's due to the existence of the ex-dividend date. The ex-dividend date is usually set two business days before the record date. Those two days allow trades to settle.Using your example, my guess is that the ex-dividend date would be 3/12, so you'd have to buy before that date to get the dividend, not on that date.Here's the SEC's more detailed explanation:http://www.sec.gov/answers/dividen.htmMike
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