4 ms·
But as far as I understand it, the actual transfer of the underlying shares does not happen in a fraction of a second. The only thing that happens in a fraction
by aserafini 6y ago
But as far as I understand it, the actual transfer of the underlying shares does not happen in a fraction of a second. The only thing that happens in a fraction of a second is an agreement between two parties to settle some shares in the near future.
Executing a trade is not the same thing as the underlying instrument changing hands, which is still slow.
- jqpabc123 6y agoNowadays, the underlying instrument (i.e. a fancy piece of paper) rarely ever changes hands. It's possible to get it (with some delay) but most people don't bother. The digital/electronic record of the trade and the transfer of monetary funds between accounts is generally sufficient to establish ownership and both happen in near real time under SEC regulations between registered brokers. Basically, if the cross checked double entry accounts of buyer, seller and their brokers all agree that the trade took place, that is good enough for most folks and the SEC. Day traders can and often do buy and sell a stock multiple times in a day without delay.