WASHINGTON, February 11, 2015 – Some might wonder why we publish Wall Street’s holiday trading/settlement schedules in our CDN business and financial columns. The reason is simple. Inexperienced traders often don’t grasp the minor pitfalls when it comes to misunderstanding these dates.
In the first place, in general market trading practice, stock trades actually “settle” in what’s called “regular way settlement.” That is, the proceeds of a trade don’t actually become available as withdraw-able cash in your account until the third business day after the trade takes place.
This small but long-established fact is usually (though not always) irrelevant from a functional standpoint if you immediately re-deploy the proceeds from the first trade toward another transaction executed on the same day, as both transactions will settle on the same date anyway. But if you actually need to withdraw cash—not uncommon in our allegedly post-Great Recession world, you may be surprised to find it’s unavailable if you didn’t take the holiday into account.
Some bonds, like U.S. Treasurys, settle faster, but there’s still that little time lag you have to take into account. It’s a little bit like the Prudent Man’s stuffy but safe bank, which puts a five business day hold on any checks he deposits that exceed $1,000. It’s the bank’s way of making sure that check wasn’t written on rubber, although it’s irritating nonetheless.
Until the bank actually “settles” that +$,1000 check, though, all but $100 of that money is unavailable to the Prudent Man, unless he chooses to squawk up the bank’s food chain and get an exception. In the case of your brokerage, however, there’s no “going upstairs” on this one. Regular way settlement is U.S. law, so you need to have your dates straight.
Which brings us to the incoming “Presidents’ Day” holiday, to be celebrated this Monday, February 16. The Prudent Man actually dislikes the current moniker for what used to be known as Washington’s Birthday and the holiday always occurred on the Father of Our Country’s actual birthday, February 22.
Back in the day, this original holiday was a big deal in the Washington, D.C. area where we’ve lived, with a 4-year exception, since 1967. It was not only a holiday for everyone, but the occasion of massive and impressive DC-area bargain sales events on everything from autos to kitchen spatulas. Markdowns in some cases were mind-boggling, with many deals resembling the kind of markdowns available now only during Midnite Madness Black Friday sales events at major chain stores.
So in Washington and its suburbs, at least, not only was Washington’s Birthday a swell day off, particularly if you were a student; but it was an awesome day to do your patriotic American duty and shop up a storm of savings as well.
Alas, as with other holidays on the calendar, politically influential merchants across the country contrived to get this holiday moved by Congress to the third Monday of February, the better to encourage an entire long weekend of shopping. A quiet, not-so-frequently reported reason encouraging the switch was to subtly incorporate the Lincoln’s Birthday Holiday (February 14) under the banner of the newly-dubbed Presidents’ Day.
Lincoln’s Birthday, to the best of our knowledge, was never a national holiday, but was a holiday in many of the individual states (and still is in some)—except, of course, many in the Deep South which, at the time of the switch, was still in the last vestiges of the “Hell No, We Won’t Forget” mode. So the invention of “President’s Day” sort of finessed this. Or at least its supporters so thought.
Aren’t you glad you asked. Now that we’ve gotten a bit of strange contemporary history out of the way, let’s actually visit the trading schedule for Presidents’ Day 2015 and get on with our lives:
ON MONDAY, FEBRUARY 16, 2015: All U.S. markets (that includes equity [stock], option, and fixed income [bond] markets) will be closed in observance of Presidents’ Day. In addition, there will be no Pre-Market or After Hours trading sessions on February 16, 2015. CANADIAN MARKETS: Will be closed on Monday, February 16, 2015 in observation of the Family Day holiday; Canadian equity orders placed after the close of the U.S. Market on Friday, February 13, 2015, will route to the Canadian exchanges on Tuesday, February 17, 2015. Individual brokerage rules may vary slightly, so if in doubt, call your broker in advance of the holiday weekend.
Note that Presidents’ Day, February 16, 2015 is also a Federal bank holiday.