Dividend Arbitrage

There exists a whole process in collecting dividends. Shareholders must register the fact that they own their shares by a given date, to then receive their dividend n days later.

For a long time, before computers destroyed the arbitrage industry, investors who were savvy and able to buy volumes of shares with low commission rates created dividend arbitrage, wherein they would wait until the day before they had to register to receive a dividend to do so, collect that dividend, then simply sell the stock and move on.

For a while, the market didn't adjust to the sudden distribution of cash dividends that happened with most of the S&P 500 four times a year, so there was a "marketplace" of some 2,000+ potential dividend arbitrage instruments just in the U.S., from which the Wall Street vultures could feast and get fat.

See: Record Date. See: X-Dividend Date. See: Declaration Date. See: Pay Date.