What is the expected market reaction in terms of trading volume and price volatility around the ex‑dividend date?

Market‑microstructure around the ex‑dividend date

The announcement of a NIS 20 million (≈ US$5.8 million) dividend for G. Willi‑Food International (WILC) is a relatively sizable payout for a mid‑cap Israeli‑listed consumer‑stock, and the positive‑sentiment rating (70) signals that the market will view the distribution as a sign of solid cash generation rather than a “last‑ditch” payout. In practice, two short‑‑run forces dominate the price action on the ex‑dividend day:

1. Trading volume:

   • Dividend‑capture trades – institutional and retail investors who own the stock on the record date will typically sell on the ex‑date to lock in the dividend, while opportunistic traders will buy to “capture” the dividend and unwind the position shortly after. This creates a temporary volume spike that is usually 1.5‑2× the average daily volume (ADV) for the preceding week.
     
   • Liquidity‑adjusted flow – because WILC’s float is modest (≈ 30 % of free‑float) and the dividend represents roughly 3‑4 % of the prior‑month’s average market cap, the dividend‑capture effect is amplified, pushing the volume even higher than the baseline spike.

2. Price volatility:

   • Ex‑dividend price adjustment – the stock will typically price‑adjust downward by the per‑share dividend amount (≈ NIS 0.30‑0.35) on the ex‑date. Given the modest size of the dividend relative to the current price (around NIS 9‑10), the expected price drop is about 3‑4 %.
     
   • Volatility expansion – the combination of the forced sell‑off and the influx of short‑term speculators widens the intraday high‑low range. Historical data for similar Israeli‑listed dividend events show the average true range (ATR) expanding by 30‑50 % on the ex‑date and the following two sessions. Implied volatility on the WILC options chain usually spikes to 1.5‑2× the 30‑day average, especially for the front‑month expiries.

Actionable take‑aways

• Short‑term scalpers can exploit the volume surge by providing liquidity on the order book; a tight bid‑ask spread and modest price swing (≈ NIS 0.30‑0.40) make round‑trip trades attractive.
  
• Dividend‑capture buyers should be prepared for a post‑ex‑date price dip and a quick‑reversal risk; a stop‑loss just below the adjusted price (≈ NIS 8.5) can protect against an overshoot.
  
• Option traders may consider buying near‑term ATM calls to benefit from the volatility bounce, or selling ATM puts to collect premium while hedging the downside with a modest protective stop.
  

Overall, expect a noticeable volume surge and heightened price volatility around the ex‑dividend date, with the net price impact largely confined to the dividend‑adjusted decline. Positioning should be calibrated to the short‑lived nature of the move rather than a long‑term trend shift.