What is the difference between trade date and settlement date?

The trade date is when an investor initiates a buy or sell order, and the settlement date is when ownership of the underlying security is actually transferred. That generally happens two business days after the trade date (also called T+2). Is the settlement date the issue date?

How long does a trade take to settle?

Generally, the settlement date for a transaction is two business days after the trade date. So, if you make a trade, you should anticipate that it won’t be settled for at least a couple of business days. Depending on the specific security involved in a trade or transaction, settlement dates may vary.

Does GAAP specify a trade date or settlement date?

Well, for general industries, U.S. GAAP does not specify whether trade date or settlement date is required. As such, an entity should elect an accounting policy to account for purchases and sales of securities on a trade date or settlement date basis. But U.S. GAAP does provide specific guidance for financial institutions.

What is a trade date?

The trade date is the day on which you first enter your order to buy or sell a stock. This can be done either online, through your broker’s website, or over the phone with a live representative. The trade date represents when you commit to buying or selling a stock, and it is typically instantaneously reflected in your account balance.