T refers to the settlement date of security transaction which occurs on a transaction date + 1, + 2, + 3 days.
The transaction day represents the date on which the transaction occurs.
If you buy 100 shares today then today is the transaction date.
However, the settlement date is a little trickier because it represents the time at which ownership is transferred from the seller to the buyer.
If you buy/sell a security with T + 3 settlement on Monday and we assume that there are no holidays during the week, then the settlement date will be Thursday not Wednesday. The T of transaction date is counted as a separate day.
Whenever you are buying or selling always keep in mind that these two dates.
- Transaction date
- Settlement date
All stock exchanges in India follow a common settlement system trade takes place on a particular day (called T) and are settled after 2 business days after the trading day (T + 2).
If I am a buyer then I will get the shares in my Demat account after 2 days and if I am a seller then I will get the money in my account after 2 days.
T = Trade Day
2 = number of working days.
Trade Day:- The day on which the trade takes place either buying or selling is called trade day.
T+2 Settlement:- It is a system in which the transaction is settled after 2 working days from the trading day.