The Option Alpha Podcast

62: Dividend Stocks - Can You Buy Stock Just For The Dividend?

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Synopsis

Show notes: http://optionalpha.com/show62At least 2-3 times per week I’ll get an email from someone along these lines; “Kirk, why can’t we just buy the best dividend stocks right before the company pays the dividend, and then sell the stock the next day and keep the profit?” Seems like a cool idea, and I’ve definitely seen many smaller blogs peddling this idea to investors, but it might easier said than done.In today’s show I’ll help you understand the four most important dates you need to know when it comes to dividend investing, including a complete rundown of the fictional arbitrage opportunity that dividend investors are continuously searching for during the ex-dividend date. Plus, I’ll give you an alternative strategy for purchasing the stock at a discount, while reducing your tax liability, as well as the impact of dividend payments on options pricing.If you’ve got a friend or trading buddy who hasn’t made the jump to options yet and is still cashing “dividend stocks” and “dividend strategies” then this