Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (June 2007) ( Learn how and when to remove this template message)Securities. A:When it comes to buying shares, there are two key dates involved in the transaction. The first date is the trade date, which is simply the date that the order is executed in the market. The second date is the settlement date, at which time the transfer of shares is made between the two parties.
It is the settlement date, however, that marks an official transfer of ownership from the Seytlement to the buyer. The buyer must make Settkement within the settlement period, while the seller must deliver the purchased Stock Trade Pending Settlement within this period. Trade Date DefinitionThe trade date is the date on which an agreement is entered into.
Companies that use this date in their accounting do not wait until the funds have entered or left their account to record the transaction, but instead record it as soon as the deal is reached. Benefits of Trade Date UseUsing trade dates in accounting ensures that a company has an up-to-date record of what monies will be coming into, or going out of, its accounts.
Best Answer: The shares have been sold, but you Trad use the money.The reason the money is locked is because your brokerage is waiting for the transaction to complete. The concept with selling shares is similar. Let me explain this with an imaginary example.