DIVIDEND TRADE ROLL/PLAY

Used for listed equity securities. Method of buying and selling stocks around their ex-dividend dates so as to collect the dividend (which is 80% tax-exempt) offset by a fully-taxable capital loss. Predicated on the 80% (as of tax reform law of 1986) tax-exempt status that some corporations receive on dividend income. Japanese insurance companies are also large players due to a national regulation that allows policy distribution of income, excluding capital gains only.