Webull Settlement Date

As a trader, have you realized that when you place a trade there is a settlement date that shows on your Webull trade confirmation? If you executed a sale, you won’t be able to use the funds from that sale until the settlement date. You must be aware of this so that you do not try to withdraw your funds before they settle.

How Long Does it Take to Settle Cash at Webull?

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

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History of Settlement Date

Settlement is defined as the exchange of money for securities that have been bought or sold. Before computerized trading, settlement could occur several days or even several weeks after a trade was actually executed.

In the latter half of the 20th century with the advent of computers, settlement periods became a lot shorter and went to seven days, then five, and then three.

Finally, in September of 2017 the United States dropped to just two days for settlement. This shift was primarily thanks to changes in computing speed. Shortening the settlement period lowers risk in the financial system.

Nomenclature

The current settlement period in the United States is written as T+2. T stands for the date the trade was made, and the 2 represents an additional 2 business days. This means a trade placed on Friday would not settle until two business days additional have passed, which in this case would be Monday and Tuesday. The previous systems, therefore, could be expressed as T+3 or T+5, etc.

Foreign Markets

Some countries have also made the switch to T+2, in 2014 most European countries made the switch and as of 2016, Australia also uses T+2 for the settlement period. When the United States switched to T+2 in 2017, their neighboring countries of Canada and Mexico also followed suit and made the change.


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How to Shorten T+2 on Webull

While you cannot trade on the US Exchanges without a settlement period, there are some ways to go around the settlement date. The goal of this is to receive your payment faster when selling securities. Remember that this also means you will have to pay for purchases of securities faster too.

In the United States and other countries, options trades utilize a T+1 settlement period. If the settlement period is an important factor for you because you want trades to settle faster, and you wanted to enter a bullish position on a security, you might want to think about buying call options. This way you can take a bullish position and achieve a T+1 settlement instead of buying the stock and getting a T+2 settlement.

On the flip side, for a bearish position you would purchase a put option. This would achieve the same results as the call option but it would be similar to shorting the stock as opposed to taking a long position.

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Grab your last chance to get 12 free stocks valued up to $30,600.

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