I am new to the market and I have see the share price fall whenever company announce the dividend. Can I make a strategy around short sale the stock before dividend announcement and buy back the stock after price fall? Is someone doing this strategy?
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@Madhur it sounds good but unfortunately it wont work. Currently we follow T+1 settlement which means that stock bought/sold on the “T” day actually is delivered on the next day i.e. T+1 day. So if you sell the stock, you need to have the stock in your demat or else it would result into auction (In auction you end up paying heavy penalties)
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@amit again not possible. As soon as the dividend is announced, the price gets adjusted. In most of the cases the prices get adjusted on the expected value as well.
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