My avg buy is 21.5, up 3.24% at last close. I wait for the July 3 dividend and exit sometime after, when/if the share price drops below 22.5. Of course if the price keeps rising I don't sell. Regardless, I won't miss the next dividend and the logic is the same as with any stocks. Once I hit 100% return, I will simply reinvest the dividends and forget about it for 2-3 years.
I still don't understand what the point is. If you sell before the dividend to lock in capital gains then you lose the dividend... If you hold through the dividend, you lose your capital gain, but you get the dividend. You also don't even know what the dividend is yet. And you're creating a capital gain if you sell which will be taxed worse than a dividend. So none of it makes sense.
I explained it twice...I may sell after the dividend while the share price is higher, and buy back before the next dividend deadline. But this is contingent on the share price moving up or down, much like any other stock. With such high dividend for low share price, I'm puzzled as to why people don't buy as many shares as they can before the deadline then sell all right after...
The price doesn’t stay higher after the dividend — it drops by the amount of the dividend on the ex-dividend date. That’s how markets account for the value being paid out. It’s the same value — just shifted from stock price to cash in hand. No free lunch. So unless you're referring to the old dividend capture strategy (trying to catch a bounce post-drop), there’s no gain to “selling after the dividend.” The capital gain is offset by the drop. Limitations of the Dividend Capture Strategy Although capturing dividends can be an easy way to make quick income, it comes with several drawbacks. A list of the major disadvantages includes: Negative Price Adjustment on the Ex-Dividend Date Companies don’t just allow investors to hold their stock for one day, collect the dividend that is meant to reward long-term shareholders, and sell it immediately. The stock exchanges automatically negatively adjust the stock’s price on the ex-dividend date to reflect the upcoming payout. So if stock XYZ will pay a $1 dividend, its share price will open up on the ex-dividend date about $1 lower. This fact makes capturing dividends a much more difficult process than many people initially believe. Precise timing is needed to buy the stock at an appropriate level, hold it for a short time, collect the dividend, and actually make money on the transaction (if you collect $1 dividend but sell the stock at a price $1 lower than you bought it, it’s nothing but a wash). Loss of Favorable Tax Treatment There is a type of dividend known as a “qualified” dividend that is eligible to receive capital gains treatment of 15% instead of being reported as ordinary income by the recipient. However, the underlying stock must be held for at least 60 days during the 121 day period that begins prior to the ex-dividend date. Capture strategists will seldom, if ever, be able to meet this condition. Be sure to read more about the difference between Qualified and Unqualified Dividends. Because the dividend isn’t “free money.” The stock price drops by the dividend amount on the ex-dividend date, before the dividend is paid. Why? Simple: the company is transferring value from itself (the stock) to you (the shareholder). That $2 dividend? It comes right out of the stock’s value. So buying before the dividend and selling after doesn’t work — the price adjusts. You’re just converting one form of value (price) into another (dividend), not making extra money. If you're still unsure, ask ChatGPT why every ex-div date looks like a sudden drop for the exact amount of the dividend. — it's basic finance. Buy at $50 Current price = $52 Upcoming dividend = $2 ▶ If he sells now: $2 capital gain No dividend ▶ If he holds through ex-date: Stock drops to $50 $2 dividend received Same $2 total gain Conclusion: He’s not ahead — he’s just trading a dividend for a capital gain. Same value.
I understand all that. However, with MSTY the logic is different because it is tied to MSTR which, to some degree, is tied to BTC. BTC doesn't care about MSTY but MSTY goes up if BTC goes up, regardless of dividend timing. I got into MSTY about 5 weeks ago and the share price is up nearly 2.5% before dividend because BTC spiked yesterday (although it dropped in pre market today). On 07/03 I will get my dividend and, if the share price holds, I will exit and hope MSTY drops to buy low, but if price holds, I won't sell...like any share trade.
I don't see the value of setting times far back but even over the past 6 months MSTR is outperforming MSTY. The explanation is, MSTR went from around 365 to 420 while MSTY share price dropped from 30 to 22, negating 6 months of dividend value. To outperform MSTR, MSTY share price can't slip during the time it is held or its dividend needs to be increased to make up for the loss. In my case, my avg holding is a low 21.5 so a future rise in MSTR should lead to a share price rise for MSTY.