Fidelity Settlement Date

Did you notice that when you execute a trade for a stock or mutual fund that there is something known as the settlement date that appears on your trade confirmation? If the trade you have done is a sale, the cash received from that trade cannot be used until the settlement date. This is something you will want to keep in mind: you do not try to use these funds for another trade or withdraw them before you are able to.

How Long Does it Take to Settle Cash at Fidelity?

It takes two business days to settle funds from stock trades at Fidelity. One day is required to settle options trades.

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History of the Settlement Date

To define it in simple terms, the settlement of a trade is when the money for securities is transferred between two parties. Before the computer age and the current modern era, it might take days or even weeks for a particular trade to settle. With the methods of transportation back then, as well as hand written securities, they could not do it any faster.

In the latter part of the 20th century, as technology rapidly advanced and became more commonplace, things started to shift. At first settlement times lowered to seven days, and then a little later, five days, and then even three days.

In the fall of 2017, because of the continued efficiency and increased of use of technology, the United States reduced settlement periods to just two days. The pace of transactions was being significantly upgraded, and by reducing the settlement time they were also lowering the risk throughout the entire financial system.


In the US, we denote the settlement date as T+2. In this case, the T represents the date that the trade was made, and the +2 stands for 2 business days additional time. It should be noted that these are only business days, and would therefore not include bank holidays, or days the stock market is closed, like weekends. The old systems that were used could be denoted as T+3, T+5, etc.

Foreign Markets

Many other countries, not just the United States, also now use the T+2 settlement time. Most of the countries in Europe moved to this standard in 2014. In addition, as of 2016, Australia also uses T+2. In Hong Kong, while some trades do settle on the trade date, they do use T+2 also. When the United States moved to T+2 in 2017, Canada and Mexico did as well.

How to Shorten T+2

You cannot trade on the United States stock exchanges without a settlement period, but there are some creative methods to get around the settlement date issue so that you can get your funds faster from sales of stock or mutual funds. You should remember, however, if you want to get to your cash faster, this means you will have to pay for purchases faster too.

Options Trading

One thing to know is that options trades in the United States and many other countries operate on a settlement period of T+1. If settlement time is very important to you, you should consider reframing your equity trades as options trades; for example, to take a bullish position on a certain company, you could buy call options instead of purchasing the stock. Your position on the outlook of the company remains the same (bullish), but by using options you have adjusted your settlement time to T+1 instead of T+2. You can apply this same method if you wanted to take a short position on a company by purchasing puts.

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