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The moment a trade officially completes - when shares legally change hands and cash actually moves.
Why It Matters
There's a gap between when your trade is matched and when it's truly final. In the US, stocks settle on 'T+1' - one business day after the trade date (it moved from T+2 in May 2024). Until settlement, the cash from a sale isn't fully yours to withdraw. In a cash account, spending unsettled funds can cause a good faith violation. Settlement is invisible most of the time, but it shapes how quickly your money becomes available.
Key Points
- US stocks settle T+1 - one business day after the trade
- The match is instant; the legal transfer takes a day
- Spending unsettled cash can trigger account restrictions
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Common Questions
The moment a trade officially completes - when shares legally change hands and cash actually moves. There's a gap between when your trade is matched and when it's truly final. In the US, stocks settle on 'T+1' - one business day after the trade date (it moved from T+2 in May 2024).
There's a gap between when your trade is matched and when it's truly final. In the US, stocks settle on 'T+1' - one business day after the trade date (it moved from T+2 in May 2024). Until settlement, the cash from a sale isn't fully yours to withdraw. In a cash account, spending unsettled funds can cause a good faith violation. Settlement is invisible most of the time, but it shapes how quickly your money becomes available.
US stocks settle T+1 - one business day after the trade
The match is instant; the legal transfer takes a day
Spending unsettled cash can trigger account restrictions