Stocks, Bonds etc. -> Investing Tax Issues -> Trade date and settlement date

Trade date vs settlement date, last trading date for 2011

When investments such as stocks, bonds, etc. are purchased or sold, there are two important dates - the trade date, and the settlement date.  The trade date is the day on which the transaction occurs, and the settlement date is the day on which payment is made, and possession transfers from the seller to the buyer.  The settlement date is usually 3 business days after the trade date for stocks, or one business day after the trade date for call options and put options.  The buyer does not own the stock until settlement date.  This is important when the trade is made close to the ex-dividend date, or when the trade is made at yearend, but does not settle until after yearend.  The gain or loss on sale is recorded in the tax year of the settlement date.

The last trading date for 2011 for Canadian publicly traded stocks is Friday December 23rd, because the Canadian stock exchanges are closed on both December 26th and 27th.  Canadian stocks purchased or sold after this date will settle in 2012, so any capital gains or losses on sale will apply to the 2012 tax year.

The last trading date for 2011 for US publicly traded stocks is Tuesday December 27th.