What Is the 3-Day Rule in Stocks? Know About Stock markets are highly volatile most of the time. Stock prices go up and down and at the same time, numerous trade settlements make on a daily basis around the world. In order to keep the market stable, the trade settlement time shouldn’t be kept longer. You might have wondered someday why does it take 3 days to settle a trade? this is because the 3 Day rule in stocks applies. This rule states that all stock trading should be settled within three business days. You will get detailed information about this rule in this post so read ahead and make yourself familiar with it.
What is the 3-day rule in stocks? When you are buying any stocks, you will pay money to the seller. The money transfer should happen within three days. This trade settlement should happen within 3 days. It calls the three-day settlement rule or the three-day rule, also call T+3. If you are working with a brokerage firm for buying and selling stocks then until now, you might have thought that everything happens instantly. But that is not the case, the transfer of securities takes place within 3 days and not instantly. If you buy the stocks then your brokerage firm should receive the money within three business days and if you are selling the stocks then the shares must be delivered to your brokerage within the same time period.