Stick Date Settlement For Free

This settlement cycle is known as "T+2," shorthand for "trade date plus two days." T+2 means that when you buy a security, your payment must be received by your brokerage firm no later than two business days after the trade is executed.

For most stock trades, settlement occurs two business days after the day the order executes, or T+2 (trade date plus two days). For example, if you were to execute an order on Monday, it would typically settle on Wednesday.

It's when ownership passes from the seller to you, and you pay the balance of the sale price. The seller sets the settlement date in the contract of sale. As a general rule, property settlement periods are usually 30 to 90 days, but they can be longer or shorter.

On February 15, 2023, the Securities and Exchange Commission (the "Commission") adopted a rule amendment to shorten the standard settlement cycle for most routine securities trades from two business days after the trade date to one business day after the trade date (or from "T+2" to "T+1" in common parlance).

Technically, there is no waiting period. You can sell a stock seconds after buying it. However, frequent day trading might classify you as a 'Pattern Day Trader' by the Financial Industry Regulatory Authority (FINRA), which carries certain requirements.

What's the difference between trade date and settlement date? The trade date is when an investor initiates a buy or sell order, and the settlement date is when ownership of the underlying security is actually transferred. That generally happens two business days after the trade date (also called T+2).

Investors must settle their security transactions in three business days. This settlement cycle is known as "T+3" ? shorthand for "trade date plus three days." This rule means that when you buy securities, the brokerage firm must receive your payment no later than three business days after the trade is executed.