How are dividends paid into my US options and futures account?
When dealing with dividends, there are three important dates you need to know. Knowing the dates below will help you determine whether or not you receive the dividend (from long shares) or when you will owe the dividend (from short shares).
- Ex-dividend Date (Ex-date) / Stock Record Date
- Stock Settlement Date
- Dividend Payable Date
Due to the T+1 stock settlement time, the last day to purchase a stock or exercise a long call(s) to be entitled to the dividend is the trading day before the ex-date. On the other hand, if you are short a call, then you may owe the dividend if you are assigned short shares before the ex-date (Dividend Risk). The Dividend Payable Date is specified on a date after the Record Date by the underlying company or ETF company.
| Monday | Tuesday (Example Ex/Record Date) |
| Last day to buy shares or exercise long call(s) to be eligible for the dividend. | Ex-date / Record Date When stock trades without the dividend. Owners of the shares are entitled to dividend. |
| Buy Shares | Settlement Date |
Getting paid or receiving a dividend
Do you hold any stocks that pay a cash dividend? If so, the cash dividend will appear in the History tab as a credit and will post to your account a day after the payable date and reflect in your account's cash balance. Dividends with three asterisks (***) before the description are dividends paid by a foreign corporation and are generally subject to foreign taxes withheld upon payment.
Paying or owing a dividend
Were you assigned short stock or held a short stock position and owe the dividend? If so, the dividend amount will initially list as a pending cash entry when the underlying trades ex-dividend. The owed dividend will appear in the History tab as a debit on the payable date and deduct from your account's cash balance.
