What is an ''ex date'' in stock dividends?

The "ex date," or ex-dividend date, is the cutoff date established by a company to determine which shareholders are eligible to receive an upcoming dividend payment. To qualify for the dividend, an investor must purchase the stock before this date, as shares bought on or after the ex date do not entitle the buyer to the declared dividend. Typically, the ex date is set one business day before the record date, when the company officially records the shareholders entitled to the dividend. This date is crucial for investors to know when planning their trades around dividend payments.