Structure Date Settlement For Free

The settlement date is the date when a trade is final, and the buyer must make payment to the seller while the seller delivers the assets to the buyer. The settlement date for stocks and bonds is usually two business days after the execution date (T+2).

When you buy or sell securities, there are two key dates: The trade date (known as T) ? the date when your order trades on the market. The settlement date (known as T+2) ? when money is exchanged for ownership of the investment.

For example, suppose you placed an online trade order on Monday, June 8, and it was executed on the same day. So, Monday, June 8, becomes your trading date. Then the settlement date will be Thursday, June 11, three days after the trade date and represented as T+3, where T is the trade date.

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).

The settlement date of the disposition, not the transaction date, is the relevant date for each trade executed for income tax purposes.

When securities are sold, however, the cash is not instantly available. There is a settlement period of up to two days for most stocks, mutual funds, and ETFs; bonds typically have a slightly longer settlement period.

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.