What’s the difference between trade vs settlement date?
There are two key dates involved in the sale and purchase of securities. The first date is the trade date, which is simply the date that the order is executed in the market. The second is the settlement date, at which time the transfer of shares is made between the two parties.
On trade date, an obligation arises for both of the parties involved in the order. The buyer is obligated to provide the necessary funds (cash) to pay the seller and the seller is obligated to have the adequate number of shares to transfer to the buyer.
The dates used to calculate portfolio balances is the trade date, the date the obligation arose for both parties to execute the transaction.