(04-18-2021, 12:15 PM)ken-do-nim Wrote: Been doing some research. With regards to the highest quarterly dividend payer, I've come across MVO MV Oil Trust. It pays a whopping 17.25%.That will be the recurring theme if the dividend is the only reason to own the stock or fund. If the annual div is say 8% or more, the QTR div is 2% of course. You'll be lucky if the stock or fund isn't down nearly that much for days or weeks. One factor that helps as people don't pay attention, and but a stock a few days after Ex-div because they weren't aware and think they are getting a stock on sale. I've seen that on this forum.
It went Ex-Div April 14th. Relevant end-of-day prices:
April 9th: $5.44
April 12th: $5.58
April 13th: $5.60 (last day to own to qualify for the dividend)
April 14th: $5.14 (... and down)
April 15th: $4.96 (... and more down)
April 16th: $4.87 (... and even more down)
So this confirms what fenders says. The higher the div, the bigger the fall after the dividend date. I'll keep watching to see when it recovers.
Next I'll look at something with a relatively tame dividend, maybe something in the 2-3% range, and see what happens.
Take a stock like HD or AAPL and the Ex-div is pretty meaningless after a few hours. If the market is bullish that day it will move up like the Ex-div never even happened.
I will add shares a week or so before Ex-div if I was planning on building the position anyway. When I sell puts, 90% of th time I choose a date that forces the buyer to give me a dividend a week after they exercise me. When selling calls, I avoid the Ex-div enough that they won't be tempted to steal my shares because they have to eat the extrinsic value in my open option premium. It's not a life changing event if I am only dealing with a single contract and 100 shares, but it adds up if I do it 25 times a year. The guy on the other side of the trade might be dealing with 10,000 shares and div matters a lot. If that sounded fancy, trust me it isn't.
Back on topic, there is very little chance you are going to snipe dividends buying and selling funds with 12% yields.