Shortened (T+1) Settlement for Stock Purchases

For stocks in the Russell 3000 Index, IB Customers who write covered calls generally will be able to take advantage of IB’s Shortened T+1 Stock Settlement feature by purchasing shares to satisfy their delivery obligations rather than using existing shares (thereby potentially avoiding a higher tax liability). Shortened Settlement equity trades settle one day after the trade instead of two days after).

The feature is available to all IB Customers Monday 09/11/2017. IB Customers must enable this feature as a trading permission via Account Management.

Shortened Settlement may not be available for particular securities or on a particular date or time. For example, IB may not be able to find a counterparty who is willing or able to sell shares for Shortened Settlement. Shortened Settlement trades generally will be executed against an IB affiliate, which may profit or lose in connection with the transaction.

You generally will pay a higher price for shares you purchase for Shortened Settlement. In addition, certain price protection rules that apply to regular way settlement do not apply to Shortened Settlement trades.

Shortened Settlement trades are conditioned on your order satisfying credit, risk and other applicable regulatory requirements. Use of Shortened Settlement may be part of a strategy to minimize tax exposure. IB and its representatives cannot offer tax advice. You and your tax advisor should evaluate whether use of Shortened Settlement will result in the desired tax consequence.