Dividends

Transaction costs/stamp duty on purchase/sale say of Euro 15k worth = 2.0%

Dividend net of all taxes = 2.18%.

If you hold for the medium term at least your costs are covered on buying/selling the shares.

You are assuming that the share price will fall in line with the dividend once it goes ex dividend.

It will in all probability fall on ex dividend date but then again it may not or then again it may only fall a small amount or recover within a few days.

Will re-visit this perhaps next Thursday/Friday to see how my hypothetical purchase of Euro 15k at today's price of €13.75 works out taking all things into consideration. Let's see what my pot will be worth say Frdiay week lunchtime. Will post 2.00 p.m that day. I expect to be in profit.
 
Yeah - me too. As ever the EMH would clearly dictate that if there was some failsafe or almost failsafe advantage here then common knowledge of it would eventually cause it to disappear.
 
You are assuming that the share price will fall in line with the dividend once it goes ex dividend.

It will in all probability fall on ex dividend date but then again it may not or then again it may only fall a small amount or recover within a few days.

Will re-visit this perhaps next Thursday/Friday to see how my hypothetical purchase of Euro 15k at today's price of €13.75 works out taking all things into consideration. Let's see what my pot will be worth say Frdiay week lunchtime. Will post 2.00 p.m that day. I expect to be in profit.

Daddy, there are hedge fund managers and savvy traders scrambling over each other trying to exploit tiny market inefficiencies, you're being wildly optimistic to think that the price might not fall on the due date. It's a foregone conclusion. If price does not fall, then it will be for some other reason, ie, some news item that moves the market. Markets are not perfectly efficient but they're not so slow as to allow your plan to work.

As for dealing costs/stamp duty of 2% - that's reason enough not to trade the Irish market.
 
Clubman/Jimbo
(Posting today and not tomorrow as no access to computer tomorrow)

Well - I am in profit as I expected on my hypo 15k but not by as much as I thought/hoped.

Buy price 13.75

Sell price 13.85 (current)

Dividend net of 41% tax .302 cent

Pur 1,091 shares cost incl 1.5% transaction costs 15,226

Sell 1,091 shares incl .5% transaction costs net receipt 15,034

Loss on buy/sell = 192

Dividend equates to = 329

Net profit for 8 days € 137.00 if sold now.

By comparison high yielding deposit a/c would have earned approx € 15 net of tax for 8 days.
 
Congrats, you're the first man on the planet to discover an arbitrage situation playing cum/ex. div dates - what's scary is, I think from your posts you actually believe that ! Your house on the next position so...................... and in due course you can find mabs here.
 
Funny but I can guarantee you I w'ont be seeing Mabs.

The play was a sound company and not a fly by night one.

My costs are covered and can you tell me where I would have got a better return in 8 days for my money ?
 
Enlighten me so Clubman.

After all this was just an exercise the result of which you were looking forward to seeing.

Demoivre:

Just spotted your post from yesterday re 'Anyone experience negative equity on their house'.
Looks like your nearer to seeing 'Mabs' than I am.
 
Clubman : Your reply disappoints me as a moderator.

If I had made hundreds on this exercise you knew from the outset that I could'nt make real money yet you were looking forward to seeing the result and now to throw out this last comment is very low.
 
Daddy said:
Demoivre:

Just spotted your post from yesterday re 'Anyone experience negative equity on their house'.
Looks like your nearer to seeing 'Mabs' than I am.
Click to expand...

lol. I was having a laugh in that thread because I didn't take Mick1166 seriously which was why I replied with this. TBH , bar that bloke in Some Mothers do 'Ave 'Em, I didn't think the joke would go over anyone's head!
 
Hi Guys,
I thought I understood this but from reading your previous emails I've become a bit confussed.
If I have 100 AIB shares and they pay a dividend of 52cent per share.
That means I get a dividend payment of €52.
As I'm on the higher rate of tax, am liable for 41% of €52 as tax?

If I original brought the 100 AIB shares at €10 per share and then few yrs down the road sold them for €20 per share, I'm required to pay 21% or 23% tax on the €1000 profit I made on the shares?

Is all the above correct?
 
If I original brought the 100 AIB shares at €10 per share and then few yrs down the road sold them for €20 per share, I'm required to pay 21% or 23% tax on the €1000 profit I made on the shares?
Click to expand...

DMAn

CGT is at 20%
 
PMU said:
Interesting, but you aren't actually allowed to invest with hindsight. You have to trade today at today's prices.
Click to expand...

This exercise is pointless. Had the op sold his hypothetical AIB stock twenty minutes ago and reported back here as he said he would, he would have got eur 13.6 for the stock and lost money overall on his position. Let the op post his next 100 trades to test his strategy - the odds are stacked against him playing cum/ex div dates and the costs are insane ( despite the fact the op doesn't think so) short term trading the ISE.
 
Two more questions to this tread...as a paye employee how do you make your tax payment on your dividend income declaration... submit chq payment to revenue?

Also re "DRIP" option to reinvest divend end payments in additional shares instead of cash...how does one go about doing this? Any tips to minimise charges?

Thanks,
Docker
 
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