The dividend capture strategy and its benefits

There are many strategies that more and more investors are using to help them earn more income from their capital. This can essentially be a real benchmark for those who rely on investment returns to meet their living expenses (retirees in particular) or those who are simply trying to build wealth in a better way before they retire. Find out more about an alternative strategy called dividend capture and its benefits here.

What is dividend capture?

Dividend capture is a strategy based on a very simple principle that boils down to the income investor trading to try and capture cash payments from more shares than would otherwise be possible. This is why many people ask this question: what are trading algorithm . In other words, it is an income-based trading strategy, visibly and obviously different from simple buy and hold, in that rather than receiving typical quarterly dividends from a few stocks, the trader is active in receiving a steady stream of dividends from a wide variety of stocks held. And for very short periods of time.

Is dividend capture beneficial?

Using the dividend capture strategy can benefit income investors by allowing them to receive many more dividend payments than another trader who simply holds them throughout the year. However, this does not imply that using this strategy will allow investors to generate higher total returns. This is because the companies that pay the dividends take care to telegraph the ex-dividend dates, allowing any market participant to know exactly when the ex-dividend stock will be traded, as well as the price needed to do so. In addition, investors, thanks to this strategy, know that the payout will come and thus have made a sympathetic offer just before the ex-dividend date. Dividend capture is proving to be effective for investors. It is a trading strategy that is used by traders.