What is a settlement period?

The settlement period is the time between the trade date (the date when the transaction occurs) and the settlement date (the date when the payment is made and the transfer of the securities’ ownership occurs). In general, stocks settle T+1, i.e., trade date, plus one business day.

When should a cash account be paid in full?

Cash accounts require that all stock purchases be paid in full, on or before the settlement date. The settlement period is the time between the trade date (the date when the transaction occurs) and the settlement date (the date when the payment is made and the transfer of the securities’ ownership occurs).

How long do you have to settle cash before opening trades?

This means you will be required to have settled cash in that account before placing an opening trade for 90 days. Prior to the sale of ABC settles on Tuesday, February 3, a customer sells 100 settled shares of ABC, which generates proceeds of $5,000. This trade will settle on T+1, which is Tuesday, February 3.