T+1 Early Stock Settlement

A standard disadvantage of buy-writes has been the probability of setting off undesirable capital gains tax on previously purchased stock shares in the event the options are assigned. T+1 stock settlement grants you the right to purchase replacement shares to use against an assignment and possibly exclude capital gains and an increased tax liability. This strategy may be appropriate if you want to continue to hold shares in your account that were subject to the option assignment.

  • Tag US stock shares for early settlement, granting you the ability to purchase shares after the assignment notice and still have these shares in your account before the option assignment clears.
  • It’s simple to tag stocks for early settlement. Simply choose TPLUS1 as the order destination before you submit the stock buy order.

Essential Information Regarding T+1 Settlement:

  • T+1 Settlement is only available on specific equity securities at our discretion, and these securities might change from time to time. The executing broker reserves the right not to provide T+1 Settlement for any reason and for any time.
  • T+1 Settlement trades will usually be executed against an associate of the executing broker, which may gain or lose in connection with the translation.
  • T+1 Settlement trades might be unavailable for certain securities on a certain date or time. For example, the executing broker might not be able to find a counterparty who is able or willing to sell shares for T+1 Settlement.
  • You may pay a different or worse price for shares you purchase for T+1 settlement (i.e., for non-regular way settlement you might pay more than the leading price provided in the market for regular way settlement). Furthermore, certain price protection rules that apply to regular way settlement do not apply to T+1 trades.
  • T+1 trades are constrained on your order satisfying credit, risk and other relevant
    managing requirements.
  • Use of T=! Settlement may be part of a strategy to lower tax exposure. We do not provide tax advice. You and Your tax advisor should calculate whether using T=1 Settlement will result in the appropriate tax consequence.
  • The TPLUS1 order destination is not provided during the period which includes the five (5) business days prior through the five (5) business days succeeding to the effective date of any corporate action.
  • Before you can choose the TPLUS1 destination, you must allow the trading permission United States (T+1 Settlement Program) in Account Management*.