Settlement date?

[Darior]

Hi,

I'm trading on margin and I attached picture of my transactions, so please if anyone could explain me what is settlement date?
Does that mean that I have to sold (if I'm long) security by that date, I can't hold it for example one month?

thanks

[Darior]

If anyone can help me on this I would really appreciate it.

This is what I found: "Settlement date is the date by which an executed security trade must be settled. That is, the date by which a buyer must pay for the securities delivered by the seller."

Does that mean I can't buy/sell stock on a margin and held it for example one week or longer (if my settlement date is three days)?

thanks for help

[Soverus Khan]

Originally Posted by Darior

If anyone can help me on this I would really appreciate it.

This is what I found: "Settlement date is the date by which an executed security trade must be settled. That is, the date by which a buyer must pay for the securities delivered by the seller."

Does that mean I can't buy/sell stock on a margin and held it for example one week or longer (if my settlement date is three days)?

thanks for help

What is your account balance? PDT rule?

[Darior]

Khan, thanks for your answer, well my account is bigger, so I don't have to worry about PDT rule.

I'll have to contact my broker, because there is no explanation about that on their site (Thinkorswim)...

[Leth]

i may be confused by your question...but maybe this will help.

lets say you have a 50000 dollar account, you then buy one soy bean contract cuz your sure its gonna go up. but it doesnt...in fact..it starts to go against you. so...you hold on to your loss....and your 2500 is gone..in fact...your still holding onto it and you go -2500 + fees in the hole. so your total account balance is now 47500. that -2500 dollar margin was settled automatically by your online broker that same day since you had funds to cover it. in this case, your settlement date (day) would be any day you lose margin money and have to pay by end of day.

or

now..lets say you had a 2500 dollar account...you bet your whole wad on a soy bean contract...and you again held onto your loser and are at -2500. since you dont have the added funds in your account...your broker can't take any money out automatically. so he will call you and give you a settlement date on which to have this amount paid...up to 30 days..and of course, the broker will charge you a hefty interest rate.

or

are you talking about a settlement date in the fact that you dont want to take delivery on a contract and want to liquidate your position before the end of the contract (having the contract settled)?

are any of these what your talking about?

michael

[Darior]

Michael thanks for your answer,

well lets say that my account is 50k$ and I have another 50k$ on margin.
So I purchase long 100 shares (1000$ per share) for that 100k$ and when I look to my "transactions list" i have there column "settlement date" which is three days from the day I purchase that stock.

You can see the picture of my transactions I attached in my first post about settlement date.

example:

05/29/08 +100 shares of XYZ and settlement date is 06/03/08

My questions are:

Do I have to sell my positions by that date, and satisfy margin?
Could I hold my positions after settlement date?

thanks

[Leth]

The date by which an executed security trade must be settled. That is, the date by which a buyer must pay for the securities delivered by the seller.

The settlement date for stocks and bonds is usually three business days after the trade was executed. For government securities and options, the settlement date is usually the next business day.

There are three types of brokerage accounts that can be used for buying and selling securities: cash accounts, margin accounts, and discretionary accounts. Using a cash account, the investor is required to pay the full price of the securities purchased on or before the transaction's settlement date. The settlement date is usually three business days after the order to buy or sell has been executed (the trade date). For government securities and options, the settlement date is generally the next business day after the trade date. The securities must also be delivered within three days to avoid any additional fees. After the settlement date, the proceeds of the sale – minus commissions – are either mailed or deposited into the seller's account with the brokerage firm (assuming the seller is also using a cash account).

Hope this helps

Michael

[Darior]

Thank you Michael, things are clearer now...