SIE practice questionhardExercise/Assignment
When an option is exercised, how soon must settlement occur?
- AWithin two business days (T+2)
- BImmediately
- CWithin one business day (T+1)✓ Correct answer
- DAt the end of the expiration week
Explanation
Why C — Within one business day (T+1)
After the U.S. move to T+1 settlement, listed option exercises that result in delivery of the underlying security generally settle on the next business day. T+2 is the stale pre-2024 cycle.
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