Trace Date Settlement For Free

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.

In March 2017, the SEC shortened the settlement period from T+3 to T+2 days. The SEC's new rule amendment reflects improvements in technology, increased trading volumes and changes in investment products and the trading landscape. Now, most securities transactions settle within two business days of their trade date.

The settlement date is the date on which a trade is final, when the buyer pays the seller and the seller delivers cleared assets to the buyer. The settlement arose to deal with the complex process of clearing a transaction but has since been reduced to as little as two business days (T+2) through the use of technology.

AM ET on the settlement date.

Cash settlement is for investors who need their trades finalized quickly. As long as a cash settlement trade executes before pm ET, the trade settles the same day. Broker-dealers may charge a little extra to perform this trade, but it is available to investors.

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. For some products, such as mutual funds, settlement occurs on a different timeline.

The SEC's new rule amendment reflects improvements in technology, increased trading volumes and changes in investment products and the trading landscape. Now, most securities transactions settle within two business days of their trade date. So, if you sell shares of stock Monday, the transaction would settle Wednesday.