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13 December, 13:50

Jack purchased 100 shares of Ford stock on April 22, 2018. If he sells the stock on April 21, 2019, what is the character of the sale?

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  1. 13 December, 16:11
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    The sale in this situation is a trading.

    Explanation:

    The buying and selling of stocks for short periods of time is termed trading. This is usually dependent on the stock prices but also on the holding period which goes from 3days to 364days. This period starts as from 3 days because of the 3-day settlement rule which requires that the brokerage firm clears all payments within these days, either for stock bought or sold.

    Any stock held beyong 364 days becomes long term gain and such sale is considered investing.
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