A YouTube video by Dan Novaes explaining the dividend capture strategy: buy a stock shortly before its ex-dividend date, hold through the cutoff to receive the dividend, then sell—potentially holding only days rather than months. The video covers mechanics (expected post-dividend price drop roughly equal to the dividend), tactical requirements (timing, volatility, sell targets), tax/account considerations (short-term capital gains vs. Roth IRA), and a personal example using MSTY where the speaker received $6,191 on July 7 (~$1.24/share for 5,000 shares).
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When most people hear the word dividend, they think it's something you only benefit from holding a stock for months or years. What if I told you there's a way to collect dividends without being a long term investors? The strategy is called dividend capture. Here, here's how it works. You buy a stock right before its expected dividend date. That's the cutoff. Own it by then and you get the dividend hold through that day. Then you can sell the stock and still collect the payout. The holding period might just be two or three days. So you're not necessarily buying the stock just because you love the company. Although it's better if you do. But you're buying it because of the dividend. Here's where things get tactical. Stocks usually drop in value by the dividend amount right after the expected dividend date. So. So if a company's paying $1 per share in dividends, the stock might open a dollar lower the next morning. Your goal is to time it right, collect the dividend and minimize any losses from the price dip. So this isn't a set it and forget it strategy. It's pretty surgical. You've got to know the dates, you've got to know the volatility, and you have to have a sell target going in. So if you're someone who likes short term opportunities and has the time to monitor your trades, this is a way to stay stack consistent small wins. Hedge funds do this at scale. But even as an individual investor, you can run the strategy a few times a month and create a passive income layer without needing to hold very long. Sites like Dividend.com Market B and even Nasdaq's dividend calendar will help you track expected dividend dates ahead of time. You can build a watch list, time your buys and look at dividend yields to find opportunities. And of course this works best in tax advantaged accounts like the Roth IRAs. And we have done videos about that, so we really recommend you watch them. But this will make it so that you don't get dinged on those payouts. And if you're running this in your brokerage account, you need to understand your short term capital gains exposure, which essentially means that you will pay a higher tax rate than long term capital gains. Or if you're running this in your brokerage account, understand your short term Capital gains exposure, which essentially means you're paying more tax in your short term capital gains versus owning the stock long term and in which the IRS gives you an incentive to do that and you pay lower tax on your profits. So this recently happened to me over the last couple days. So today is July 7th. I own the stock called MSTY. It's effectively a dividend based yield stock of MicroStrategy. So sometimes there are companies or funds that will create these types of solutions for investors. I would recommend you checking this one if you're interested in the crypto space. MicroStrategy is a big bitcoin company that is buying a lot of bitcoin. In any case, I own 5,000 shares of this specific stock and on July 7th I got paid $6,191, about $1.24 per share that I own. Now every month I'm getting yield and dividends on this stock. And today the stock trades at about $21, you know, and so the close on the 6th or on the 7th when this happened was it closed at $20, It closed at $20.06 approximately and it's actually gone up a dollar. So in this case, had I gotten entered into the stock the day before, on the 6th, it was in that same range, that 20 to $21 range, I could have captured the $1.24 and effectively I get this yield for free. And I was actually able to sell at a value that's a dollar higher than what I entered into. Now this may not always be the case, see, but this is an example where dividends can actually pay, where the strategy actually makes sense and you can actually get paid to own stocks for very short periods of time and make money through this dividend yield strategy. This isn't risk free. Stocks don't always bounce back right away. And if you're not careful, the drop could outweigh the dividend. But in some cases, as we've seen here, the stock price may actually go up where you can make that profit. So you need to be selective. Stick to stable low volatility dividend stocks. If you are interested in higher yield stocks like MicroStrategy, that is an option that you could do. But. But just be prepared to understand what you are holding. But here's the big idea. Most people only think of stocks in two modes. Buy and hold or day trading. This is something in between, a way to harvest value without going long or gambling. If this sounds interesting to you, join our free community. You don't need to be rich to live like the 1%. You just need to learn what they do. This is ubk.
