Definition
Settlement is when the buyer receives securities and the seller receives payment. For U.S. stocks, settlement is T+1 (one business day after trade date). Before settlement, cash from sales isn't available for withdrawal, and purchased securities can't be transferred. Understanding settlement prevents good faith violations.
Example
You sell stock on Monday (trade date). Settlement occurs Tuesday (T+1), when cash becomes available for withdrawal.
FAQ
What is Settlement Date?
The date when a securities transaction is completed.
Why is Settlement Date important?
Settlement Date helps investors evaluate trading mechanics and make more informed decisions.