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What is a Settlement Date?

The length of time after a trade is executed that the securities are due delivered and the payment is due paid varies for different types of transactions, but the date on which this occurs is the settlement date.

Most exchange-traded corporate securities in the United States are required to be settled three days after the trade order is entered, which is called T+3. That date is the settlement date, and is the final date on which the transaction must be finalized by both parties involved.

The spot price for the transaction is from either the time of the trade or from the value date, as in Forex transactions. Many securities, such as government bonds, settle the next day (T+1).

What are Common Questions about Stocks?
What Does Diversification Mean?

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