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0 pointstomatocracy6y ago0 comments

Ex as a prefix does ultimately derive from Latin here but meaning "outside" (hence eg excommunicated or exclave), not "without". This makes sense linguistically because the entitlement to the dividend is outside the scope of what's being bought and sold in the trade.

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thaumasiotes6y ago

The meaning of ex in ex-dividend is not "outside".

As originally used in the financial jargon ex-dividend date, ex is used correctly and has the sense "after (in time)". That is, if you buy something ex-dividend, the dividend has already been paid (you're buying after the payment), and so you won't get it. [1] It's sense II in Lewis and Short ( http://www.perseus.tufts.edu/hopper/text?doc=Perseus%3Atext%... ) (Note sense II.A.2, which gives us the more vernacular English prefix ex-, as in ex-wife.)

"Outside" is not even one of the many senses of ex in Latin; ex always has a sense related to the core concept of "from". "Outside" is extra.

[1] For some reason, the ex-dividend date is one day before the actual payment, but the idea is still that you're buying after the date of the dividend.

frankc6y ago

Just a minor correction. The ex-date is not necessarily the date it is paid. It is the day after holders of the security are entitled to the dividend. The actual pay date comes later. The important thing is that the price of the security adjusts on the ex-date because the money has now been allocated.

tomatocracyOP6y ago

The ex date is the first day when the security trades without rights to the dividend (or rights, or coupon etc). It's not the day when holders are entitled to the dividend because if you trade on a particular day, you don't own the securities until settlement occurs which is on a later day (different markets have different conventions here for how much later). The company/issuer will have a record date for administrative purposes when they take a snapshot of the ownership register so the ex date is the first date on which settlement will take place after that record date. The payment date may even be some weeks after this but is set by the company but this isn't really relevant to when the ex date is.

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