How do hard stop orders work with dividends?

Question

If I set a hard stop at a come dividend price what stops me collecting the dividend and charging the capital loss to the broker?

A hard stop guarantees the stop loss price to be the one quoted e.g. not the first price available after a fall.
What if I buy ABC PLC at 100p (come dividend), set a hard stop at 99p & then collect a 5% dividend selling at a 1% capital loss?

Answer 1

Not sure what a 'hard stop order' is, however I'm going to assume it's a 'stop loss' order and is triggered when the share Price drops below your chosen limit.

re: Dividends = you don't 'collect' the dividend - it is SENT by the Company to who-ever is entitled to it.

If the price drops to the 'stop loss' point prior to the ex-dividend date, then your shares will be sold together with the rights to the dividend. The new owner will be sent the dividend.

If you sold on or after the xd date then the divided will be sent to you (anything up to a couple of months later).

If you set the price = last price quoted prior to xd. then you will have sold the dividend rights as well.