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T+1 (T+2,T+3)

What is 'T+1 (T+2,T+3)'

Abbreviations that refer to the settlement date of security transactions. The T stands for transaction date, which is the day the transaction takes place. The numbers 1, 2 or 3 denote how many days after the transaction date the settlement or the transfer of money and security ownership takes place.

Explaining 'T+1 (T+2,T+3)'

For determining the settlement date the only days that are counted are those on which the stock market is open. T+1 means that if a transaction occurs on a Monday, settlement must occur by Tuesday. Likewise, T+3 means that a transaction occurring on a Monday must be settled by Thursday, assuming no holidays occur between these days. But if you sell a security with a T+3 settlement date on a Friday, ownership and money transfer does not have to take place until the following Wednesday.

Do not, however, think of the period between transaction and settlement as a flex time in which you can back out of the deal. The deal is done on the transaction day--it's just the transfer that does not take place until later.


Further Reading


Economic order quantity model with trade credit financing for non-decreasing demand
www.sciencedirect.com [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

Event studies in economics and financeEvent studies in economics and finance
www.jstor.org [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

International financial integration and economic growthInternational financial integration and economic growth
www.sciencedirect.com [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

Spurious regressions in financial economics?Spurious regressions in financial economics?
onlinelibrary.wiley.com [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

The direction of causality between financial development and economic growthThe direction of causality between financial development and economic growth
www.sciencedirect.com [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

Financial development and economic growth: Evidence from ChinaFinancial development and economic growth: Evidence from China
www.sciencedirect.com [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

Financial development and international trade: Is there a link?Financial development and international trade: Is there a link?
www.sciencedirect.com [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

Using financial prices to test exchange rate models: A noteUsing financial prices to test exchange rate models: A note
www.jstor.org [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …

Financial intermediation and growth: Causality and causesFinancial intermediation and growth: Causality and causes
www.sciencedirect.com [PDF]
… Inventory. Trade credit. Increasing demand. Finance … Chung and Huang [10] developed an economic production quantity model (EPQ) for a retailer where the supplier offers a permissible delay in payments … 1 T [ ( s − c + s I e M ) ( a T + 1 2 b T 2 ) − ( h + s I e ) ( 1 2 a T 2 + 1 3 b T 3 …



Q&A About T+1 (T+2,T+3)


When do you use a settlement date of T+3?

You use a settlement date of T+3 when a security is sold on Monday and must be settled by Thursday, assuming no holidays occur between these days.

What is the abbreviation for T+1?

T+1 stands for transaction date plus one.

What are the numbers that follow T+1?

The numbers following T+1 represent how many days after the transaction date settlement takes place.

How does this affect transactions occurring on Friday?

If you sell a security with a settlement date of T +3 on Friday, ownership and money transfer does not have to take place until the following Wednesday.

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