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Account Settlement

  

Categories: Banking, Bonds, Metrics, Trading

When you "settle your accounts," you pay your bills. Never a bad idea.

Related or Semi-related Video

Finance: What is T+3?1 Views

00:00

finance a la shmoop what is T plus 3 doesn't that sound like a new Arnold

00:08

Schwarzenegger robot or uh like a new transformer Megatron or something yeah [police robot falls over]

00:13

maybe not so that T here is time as in days and the three is um you know the

00:20

number of days that is if you put in an order on Thursday with your stockbroker

00:25

on a three-day holiday weekend call it dunno Labor Day weekend and your [calendar]

00:31

particular purchase is a t +3 settlement type of purchase well it means that you [Settlement document]

00:37

will have transacted on that Thursday but then you need to wait three business [calendar]

00:42

days until that transaction is considered settled so in this case yeah

00:46

we threw curveballs at your head there there was not only a weekend to deal [batter dodges curve ball]

00:50

with but a holiday to a good one loved the hot dogs so had this been a t plus

00:55

one settlement while the trade would have been settled on that Friday if T

00:59

plus two then it would have settled no not Monday a holiday so doesn't count

01:04

it would have settled Tuesday but it's t plus three so it settles Wednesday why

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all this lag in the era of lightspeed computers well in the olden days people [worm hole to computer chips]

01:15

waited for physical delivery of a dead tree with ink on it to consider a trade

01:20

settled than it used to be T plus five or five days

01:24

stocks three and bonds and money market funds a one two three days and something

01:29

like that but things moved around as time went by today however if you hear t

01:34

minus three well it may be time to climb into your bomb shelter [countdown on tv show]

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