3 day stock option trading rule


Always check with your broker to make sure that you understand when your payment or securities are due. Some brokerage firms may charge investors fees or interest if their payments or checks do not arrive by the third day. Since firms are responsible for settling transactions if their investors do not pay, firms may decide to sell a security, charging the investor for any losses caused by a drop in the market value of the security and additional fees.

Ask your broker or brokerage firm what they plan to do if your check or payment does not arrive within three days, and what fees or charges will apply. While brokerage firms are required to send funds or certificates "promptly" to customers following the settlement of a trade, there are no deadlines imposed by federal law or regulations.

Brokerage firms will credit your account with sale proceeds as soon as your trade settles. Some brokerage firms may immediately "sweep" your money into an account that earns interest. You should ask your broker about how you can assure that all funds and securities are delivered to you promptly. If you purchase a security and would like to receive paper certificates, you should review your account agreement, as it may contain additional requirements and fees associated with ordering paper certificates.

If you have additional questions about your investments or how the securities markets work, please visit Fast Answers. You'll also find interactive tools and investor publications in the Investor Information section of our website. To file a complaint, please use our online Complaint Center. Securities and Exchange Commission. Here are the answers to some of the questions we've been asked about settling trades: Saturday and Sunday are not considered business days, so the three-day clock doesn't start running until Monday.

Your payment or check must arrive at your broker's office by the close of business on Wednesday. Generally, those days when the stock exchanges are open are considered business days. Always check with your broker to make sure that you understand when your payment or securities are due. Some brokerage firms may charge investors fees or interest if their payments or checks do not arrive by the third day.

Since firms are responsible for settling transactions if their investors do not pay, firms may decide to sell a security, charging the investor for any losses caused by a drop in the market value of the security and additional fees. Ask your broker or brokerage firm what they plan to do if your check or payment does not arrive within three days, and what fees or charges will apply. While brokerage firms are required to send funds or certificates "promptly" to customers following the settlement of a trade, there are no deadlines imposed by federal law or regulations.

Brokerage firms will credit your account with sale proceeds as soon as your trade settles. Some brokerage firms may immediately "sweep" your money into an account that earns interest. You should ask your broker about how you can assure that all funds and securities are delivered to you promptly.

If you purchase a security and would like to receive paper certificates, you should review your account agreement, as it may contain additional requirements and fees associated with ordering paper certificates. If you have additional questions about your investments or how the securities markets work, please visit Fast Answers. You'll also find interactive tools and investor publications in the Investor Information section of our website.