Why declaration of dividend is one of reasons for momentum?

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Course Name: Day Trading Strategies for Beginners, Section No: 6, Unit No: 3, Unit type: Quiz

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Hi Levi



When a dividend is announced, the investors/traders know exactly the amount of the dividend and the date of its receipt. To receive this dividend amount, they have to be a shareholder on the ex-dividend date. Therefore, around the said date, many people purchase the stock to earn the dividend amount, which causes a stock to go up, thus becoming a reason for momentum.



You can read more about it here.



Hope this helps.

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Hi Rishabh,



I see. Thanks for your eplanations and useful sources.