Q: I notice for so many stocks that there is a huge increase in trading volume in the last 5 days or so of every third month. South Bow is a nice example. It trades about a million shares or less daily for most of the time then trades 3 to 5 million shares daily for the last 5 to 7 trading days in the months of March, June, September, December.. The pattern repeats every quarter.
Could you please explain this pattern for me.
Thank you Paul K.
Could you please explain this pattern for me.
Thank you Paul K.
5i Research Answer:
One cannot know for sure, but to us this looks like a 'dividend capture' trade. There are some funds/institutional investors that seek dividends, and some funds that do not. These funds typically do set-up trades so that one can capture the dividend and this can significantly increase volume in the days surrounding ex-dividend dates.