Trading hours listed for Nov. 11 Veterans Day Federal holiday

Trading hours listed for Nov. 11 Veterans Day Federal holiday

This Veterans Day 2015, markets are open, banks are closed and settlement is a little different from the norm. Details below.

An officer salutes the American flag. (Image via Google +)

WASHINGTON, November 6, 2015 – As a public service, this column always offers a short article indicating how trading and settlement rules work for upcoming Federal holidays, most of which find the markets closed. However, Veterans Day, Wednesday November 11, 2015, is a little different.

While Veterans Day is a Federal/National holiday, and while banks and the Federal government are closed, many in the private sector don’t give their employees the day off. As we recall, back in relatively recent history, the Veterans Day time off was traded in by TPTB (The Powers That Be) to allow employers to use the day elsewhere in the year, like padding the Thanksgiving Day holiday with the extra day to make a long weekend out of it, which most employees tended to assemble for themselves anyway.

At any rate, while this sadly disses our brave Veterans, in our opinion, it is what it is.

Trading hours and settlement days

As far as Mr. Market is concerned, while banks are off on the 11th, as are the Feds, trading in stocks will go on as it does on any other trading day with one exception: likely since the banking system is closed that day, Wednesday the 11th is not a “settlement day.”

For those who never quite understood this term, let us explain.

In most cases, the day you sell a stock starts a count of three business days. After those days have elapsed, the trade is considered “settled,” a little bit like when your bank puts a “hold” on a large check you’ve deposited in your account in order to make sure that check actually clears before making those funds available to you.

In the case of a settled trade, when settlement day arrives, you can cut a check for the profits you’ve booked (if any, given that it’s 2015), or whatever the proceeds of the transaction might be after commissions. Stocks are pretty liquid, but they’re not quite as liquid as the money in your checking account.

Likewise on the buy side—money to buy x shares of stock must be in your account within those three days so it’s there for settlement day. Otherwise, your broker may sell you out. No complaining. It’s all part of the labyrinth that’s called securities laws and regulations. This standard 3-day period is known as “regular way settlement.” (Bonds and some other securities have different settlement rules.)

So what happens in any buy or sell trade where the 3-day period includes next Wednesday, the 11th of November?

Since Veterans Day is a trading day but not a settlement day, if your 3-day wait starts on or coincides with the 11th, you simply need to tack on an extra day in your calculations, since the 11th doesn’t count. Simpler still, if you’re in this situation, the regular way settlement day for your transaction is effectively a day later than you thought.

Hope that was clear. If you’re a rigorous investor, you’ll likely end up reinvesting your proceeds anyway. This, you can do immediately, BTW, if you have enough cash or equity balance in your account.

Settlement day for Canadian exchanges

For reasons frankly unknown to the Maven, while Canadian stock markets are also open for business on U.S. Veterans Day, regular way settlement will follow the U.S. pattern we’ve described above. I.e., U.S. Veterans Day is also not a settlement day on Canadian exchanges, either.

If you happen to be trading in them directly, international markets will differ, of course. If you have questions on this or any other issue involved with the upcoming holiday, be sure to call your friendly broker, as nuances can vary among firms and this column can’t be aware of them all, particularly when it comes to trading on foreign exchanges.

Remember our Veterans

In the meantime, here’s wishing everyone a Happy Veterans Day Holiday in advance, even if most of our readers still have to go out to work. If that’s the case, put out the flag before you leave in the morning and take a moment to honor all the brave men and women in our relatively short national history who’ve fought in and in many cases died in wars that were fought to guarantee freedom and liberty for us all.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17