Q:

How is the kmp ex dividend date used in energy stock trading?

A:

Quick Answer

Kinder Morgan Energy Partners was acquired by Kinder Morgan, Inc., in late 2014, so the KMP stocks are no longer traded. However, users who received KMI stock after the acquisition can use its ex-dividend date for predicting changes in the stock's value on the energy market because the stock price usually changes before and after the dividend date, mentions Investopedia.com. In addition, the ex-dividend date has an effect on stock ownership.

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Full Answer

KMI's ex-dividend date is when dividends are actually paid to the stockholders. When trading on the energy or any other market, individuals should note that trades they make on the ex-dividend date will not yield dividends, notes Scottrade.com.

The few days before the ex-dividend rate arrives, the stock price usually goes up since investors want to get their dividends and are willing to pay the higher price to do so, states Scottrade.com. This can particularly occur if KMI is offering a large dividend.

However, a reduction in the stock price typically occurs on the actual ex-dividend date. This is because shareholders have been paid, and now the dividend amount needs reduced from the stock price.

When trading KMI stock around the ex-dividend date, individuals should consider the tax consequences of dividends since a drop in stock price can lead to an unrealized capital loss.

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