What is the standard delivery day for stocks?

What is the standard delivery day for stocks?

• A. T+1
• B. T+2
• C. T+3
• D. T+4

Answer: (C)

The standard delivery day for stocks is T+2, meaning that the transaction is settled two business days after the trade date. This settlement cycle was established to enhance market efficiency and reduce risk in the trading process. When a trade is executed, the buyer must pay for the shares bought, and the seller must deliver those shares. Under the T+2 standard, this exchange occurs two days later, allowing time for clearing and settling the trade. Understanding the importance of the T+2 settlement cycle is crucial as it affects liquidity, cash flow management, and the overall operations of the trading process in the financial markets.

The standard delivery day for stocks is T+2, meaning that the transaction is settled two business days after the trade date. This settlement cycle was established to enhance market efficiency and reduce risk in the trading process.

When a trade is executed, the buyer must pay for the shares bought, and the seller must deliver those shares. Under the T+2 standard, this exchange occurs two days later, allowing time for clearing and settling the trade.

Understanding the importance of the T+2 settlement cycle is crucial as it affects liquidity, cash flow management, and the overall operations of the trading process in the financial markets.