customer accounts outline

Cash account

·        Total equity=Market value + cash + money market funds

·        customer can hold Stocks/bond certificates

·        safekeeping, street name, Broker/dealer can hold customer stock/bond certificates

·        firm can NOT hypothecate, lend securities or danger the ownership of stocks/bonds

·        b/d MUST Keep securities separate and safe

A purchase of stock done regular way in a cash account shall be paid for on what day?

·        3 business days after trade

·        regular way-3 business days

·        cash transaction, same day

customer accounts outline

Cash account

·        Pay for all of purchase

Margin account

·        Borrow $ for part of trade

Settlement date

·        Different date based on type of delivery

Same day delivery,cash trade,cash delivery

·        Transaction settles that day

·        Transaction complete by 2:30pm EST

Regular way delivery settlement date

T+3

·        FINRA sets dates

·        third day after trade date

·         transfer of securities-stock,bonds,municipal bond,exercising stock (equity) options

 

T+1

·        next business day

·         transfer of $, government securities

·        Trading options-stock,interest,interest rate, foreign currency

·        Exercise index options

·        Exercise interest rate options

·        Writer gives $ to buyer of option that is exercised