Ann: BOQ delivers improved first half profit, page-90

I think the important point to note, is the shorter has to pay the dividend to the owner from his/her pocket, and doesn’t get the dividend from the company.

The shorter borrows the stock from the lender, and then sells it, pushing the price down, and then waits to buy it back cheaper and then return it to the owner. So if this wait occurs during the ex div date, the owner gets his dividend from the shorter, the shorter doesn’t get the dividend because he has already sold the share, and the new owner of the sold share gets the dividend from the coy. So if the shorter has a position open while the stock goes ex div, they have to pay the dividend from their own pocket. As you know the stock normally drops by the dividend amount ex div so it is not all bad for the shorter, and thus they don’t have to close pre ex div.

Fun and games hey?