What is T+5?

ssuni · 1 What is T+5? Tue Jun 28, 2011 9:40 pm

ssuni

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What is this case?.. Surprised

Genting · 2 Re: What is T+5? Tue Jun 28, 2011 9:44 pm

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ssuni wrote:What is this case?..

when you buy on credit, you have to settle is within 3 days of purchase, else, on the 5th day, the broker have to sell what you bought to settle that amount.

wis · 3 Re: What is T+5? Tue Jun 28, 2011 9:46 pm

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Also read this on how USA is doing and did.
http://www.sec.gov/investor/pubs/tplus3.htm

Unsettled trades pose risks to our financial markets, especially when market prices plunge and trading volumes soar. The longer the period from trade execution to settlement, the greater the risk that securities firms and investors hit by sizable losses would be unable to pay for their transactions.

For many years, our markets operated on a "T+5" settlement cycle. But, nearly a decade ago, the SEC reduced the settlement cycle from five business days to three business days, which in turn lessened the amount of money that needs to be collected at any one time and strengthened our financial markets for times of stress.

bettersrilanka · 4 Re: What is T+5? Tue Jun 28, 2011 11:07 pm

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if I pay on 4th day what will happen?? Shocked

Genting · 5 Re: What is T+5? Wed Jun 29, 2011 6:25 am

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bettersrilanka wrote:if I pay on 4th day what will happen??

Broker will not sell your shares. He waits till 5th day to force sell.

ABEST · 6 Re: What is T+5? Wed Jun 29, 2011 7:23 am

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ssuni wrote:What is this case?..

you must sell end of 4th day,if you fail broker will sell within next day around 2.00pm any price(at the moment price)

CSE Today · 7 Re: What is T+5? Wed Jun 29, 2011 10:52 pm

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ssuni wrote:What is this case?..

It's another modified version of T 56 the newest inclusion is onece you fire then it Back fires at same speed... lol!

dinusha.kiwulegedara · 8 Re: What is T+5? Wed Jun 29, 2011 11:50 pm

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CSE Today wrote:

ssuni wrote:What is this case?..

It's another modified version of T 56 the newest inclusion is onece you fire then it Back fires at same speed...

Its not a another T 56 It s a sniper.. Definitely we have to die...!!!

xhora · 9 Re: What is T+5? Wed Jun 29, 2011 11:55 pm

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bettersrilanka wrote:if I pay on 4th day what will happen??

After T+3 day broker will charge a interest for the amount outstanding
according to the broker firm this may vary from 20% to 30% p.a

dinusha.kiwulegedara · 10 Re: What is T+5? Thu Jun 30, 2011 12:08 am

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What a game Xhoro...

All for Brokers.. Not for investors...!!!

ssuni · 11 Re: What is T+5? Thu Jun 30, 2011 5:21 pm

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xhora wrote:

bettersrilanka wrote:if I pay on 4th day what will happen??

After T+3 day broker will charge a interest for the amount outstanding
according to the broker firm this may vary from 20% to 30% p.a

Hm..

Slstock · 12 Re: What is T+5? Thu Jun 30, 2011 5:28 pm

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xhora wrote:

bettersrilanka wrote:if I pay on 4th day what will happen??

After T+3 day broker will charge a interest for the amount outstanding
according to the broker firm this may vary from 20% to 30% p.a

Are the broker allowed to charge interests now ( unless for margin accounts)? Maybe some are doing so still but this is what they did before and SEC went against right?

Prince · 13 Re: What is T+5? Thu Jun 30, 2011 5:33 pm

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Whenever you buy or sell a stock, bond or mutual fund, there are two important dates of which you should always be aware: the transaction date and the settlement date. The abbreviations T+1, T+2, and T+3 refer to the settlement date of security transactions and denote that the settlement occurs on a transaction date plus one day, plus two days, and plus three days.

As its name implies, the transaction date represents the date on which the transaction occurs. For instance, if you buy 100 shares of a stock today, then today is the transaction date. This date doesn't change whatsoever as it will always be the date on which you made the transaction.

However, the settlement date is a little trickier because it refers to the date on which ownership of the security is actually transferred and money is exchanged between buyer and seller. Now, it's important to understand that this doesn't always occur on the transaction date and varies depending on the type of security with which you are dealing. Treasury bills are about the only security that can be transacted and settled on the same day.

What's the reason behind this delay in actual settlement? In the past, security transactions were done manually rather than electronically. Investors would have to wait for the delivery of a particular security, which was in actual certificate form and would not pay until reception. Since delivery times could vary and prices could fluctuate, market regulators set a period of time in which securities and cash must be delivered. Some years ago, the settlement date for stocks was T+5, or five business days after the transaction date. Today it's T+3, or three business days after the transaction date.

Here are two things you need to know to determine when you will actually own the stock or get the money:
1. If you buy (or sell) a security with a T+3 settlement on Monday, and we assume there are no holidays during the week, the settlement date will be Thursday, not Wednesday. The T or transaction date is counted as a separate day.

2. Not every security will have the same settlement periods. All stocks and most mutual funds are currently T+3; however, bonds and some money market funds will vary between T+1, T+2 and T+3. It's important that you know which it is.

Source: investopedia

hope this will clear your doubts.

ssuni · 14 Re: What is T+5? Thu Jun 30, 2011 10:25 pm

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Can't we talk to our broker & extend this time 'prince'?

Prince · 15 Re: What is T+5? Fri Jul 01, 2011 8:57 am

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for that you must get Margin Trading facility.

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What is T+5?

1 What is T+5? Tue Jun 28, 2011 9:40 pm

ssuni

2 Re: What is T+5? Tue Jun 28, 2011 9:44 pm

Genting

3 Re: What is T+5? Tue Jun 28, 2011 9:46 pm

wis

4 Re: What is T+5? Tue Jun 28, 2011 11:07 pm

bettersrilanka

5 Re: What is T+5? Wed Jun 29, 2011 6:25 am

Genting

6 Re: What is T+5? Wed Jun 29, 2011 7:23 am

ABEST

7 Re: What is T+5? Wed Jun 29, 2011 10:52 pm

CSE Today

8 Re: What is T+5? Wed Jun 29, 2011 11:50 pm

dinusha.kiwulegedara

9 Re: What is T+5? Wed Jun 29, 2011 11:55 pm

xhora

10 Re: What is T+5? Thu Jun 30, 2011 12:08 am

dinusha.kiwulegedara

11 Re: What is T+5? Thu Jun 30, 2011 5:21 pm

ssuni

12 Re: What is T+5? Thu Jun 30, 2011 5:28 pm

Slstock

13 Re: What is T+5? Thu Jun 30, 2011 5:33 pm

Prince

14 Re: What is T+5? Thu Jun 30, 2011 10:25 pm

ssuni

15 Re: What is T+5? Fri Jul 01, 2011 8:57 am

Prince

16 Re: What is T+5?

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