Ex-date is the date on or after which a stock is traded after the stock price changes for certain corporation stock activities which will have impact on the stock price such as stock split, bonus issue, stock merge and dividend distributions.
In a stock split, bonus issue, and stock merge, ex-date is the date that the share price changes to reflect the stock split, bonus issue and stock merge. For dividends, ex-date is the first day of the ex-dividend period, which means the dividend per share will be deducted from the original stock price. Hence, it is also referred as dividend ex date or dividend date. For example, stock A with stock price $ 1.00 declared to distribute $0.10 dividend. After ex-date or dividend ex date, the stock price will be $0.90. Record date, date of record or entitlement date determine the ex-date because the ex-date was created to allow all pending transactions to be completed before the record date.
In most world stock market, when investors buy or sell stock, there is a three-day settlement period ( three stock trading day ) on all buy or sell orders. Hence, in order to be entitled to receive the dividend, the investors must complete the buy order before ex-date or dividend ex-date. That is is the reason why ex-date is always two stock trading days before date of record, record date or entitlement date. For investors that managed to complete the order before ex-date, the investors will receive the dividend after payment date and the stock price will reduce on ex date. For investors that only managed to complete the order after ex-date, he will traded the stock that already deducted dividend per share and he will not receive that dividend.