Introduction: A Different Kind of Treasure Hunt
Picture this: You’re stalking a vault full of treasure. The doors swing open, sirens blare, but you? You dart in, scoop up the shinies, and slip away before the guards can even blink. That’s the genius of Harry Domash’s Special Dividend Capture strategy: claim the stock’s pop after a special dividend announcement—and vanish before the market drags you back down.
Today, we’ll unpack what a special dividend really is, why Domash’s approach is an interesting twist on dividend capture, and how you can deploy it yourself—step by step—with your own blend of flair and finesse.
What’s a Special Dividend—and Why Should You Care?
A special dividend—sometimes called an “extra dividend”—is a one-time, non-recurring cash payout thrown off by a company for things like:
- An unexpected windfall (huge profit or asset sale)
- Restructuring or spin-offs
- Strategic capital redistribution
Unlike regular dividends, people don’t rely on these for income—they’re surprise bonuses. For instance:
- Microsoft (2004) dropped a massive $3/share special dividend—around $32 billion.
- NortonLifeLock (2020) handed out $12/share, drawing attention from every dividend lover.
For traders, these payouts can ignite short-lived, sharp rallies, perfect for a smart, surgical entry and exit.
How It’s Different From, and Complements, the Dividend Capture Game
The usual dividend capture trick is:
- Buy before the ex-dividend date
- Collect the dividend
- Sell after the price rebounds
In the typical dividend capture scenario, the stock typically gets knocked down on the ex-div date by the amount of the dividend. If you use our methods (see our book), most trades are a winner.
If you want to know the secret to successful Dividend Capture, get the book: Get 20% Returns With Dividend Capture
Special dividends, though? They can leave lasting scars in price recovery, because they aren’t part of a stable income pattern. That’s where Harry Domash’s insight shines.
Domash’s Twist: Capture the Pop, Avoid the Drop
Harry Domash of Aptos (Winning Investor Daily, Dividend Detective) frames it cleanly:
- Buy the moment the special dividend is announced (same day if possible)
- Ride the stock pop—that jump is often stronger than the actual dividend due to surprise and size
- Sell before the ex-dividend date—before the market mechanically adjusts downward (I recommend you put a 1% Trailing Stop on the stock as soon as you buy it.)
In essence, you’re not there for the dividend—you’re there for the short burst of momentum. Domash’s technique is less about the payout itself, and more about exploiting market behavior around one-time events.
How to Do It: Step-by-Step
1. Monitor Alerts Religiously
- Filter dividend calendars for “special dividend” (MarketBeat, Dividend.com)
- Set real-time alerts for “special dividend declared”
- Watch: corporate filings, press releases, and earnings reports
2. Act Immediately
- Intraday announcement? Buy immediately.
- After-hours announcement? Buy at tomorrow’s open (better yet, buy in the premarket).
3. Track the Price Move
- Use intraday tools (e.g., TradingView, Thinkorswim, or your broker’s charts)
4. Exit Before the Ex-Dividend Date
- Always locate that ex-div date on the announcement
- Sell ahead of it to avoid the drop
5. Rinse, But Don’t Blaze
- Keep size modest
- Don’t let this become a distraction—treat it as a scalpel, not a bludgeon
TL;DR: Special dividends are one-off, surprise payouts. Domash’s strategy: buy at the announcement, ride the pop, sell before the ex-dividend drop—clean, tactical, time-sensitive.
My Take: Does It Actually Work?
Theoretically, yes—especially in scenarios with smaller caps, big unexpected payouts, and traders who are fast and disciplined. It can fail if the news leaks early, the pop fizzles, macro swamps the move, or the announcement is bundled with bad news.
Bottom line: It’s dynamic, quick-strike trading. Treat it as a tactical add-on, not your core plan.
Tools & Monitoring Setup
- News Sources: Google Alerts, MarketBeat “Special Dividend,” press release wires
- Charts: TradingView, Thinkorswim, Interactive Brokers
- Broker Settings: GTC orders with “Do Not Reduce/Adjust” where available
- Trade Log: Entry/exit timestamps, prices, dividend $, net P&L, fees, holding time
- Tax: Prefer tax-advantaged accounts; special divs are ordinary income; holding periods matter
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