Understanding Regular-Way Security Trade Settlement

What is the settlement date for a regular-way security trade executed on July 3?

(a) July 5

(b) July 8

(c) July 9

(d) July 10

Answer:

The settlement date for a regular-way security trade executed on July 3 would be (a) July 5.

Regular-way security trades typically settle two business days after the transaction date, known as T+2. This means that if a customer purchased a listed security in a margin account on July 3 with the order being executed regular-way, the settlement date would be July 5.

Understanding the settlement process in securities trading is crucial as it impacts how you manage your financial transactions and investments in the stock market. By knowing the settlement date, investors can plan their trades and funds accordingly to avoid any delays or issues.