What is rolling settlement?
Rolling settlement is the standard mechanism used in Indian stock markets to finalize trades. It ensures that each trade is settled systematically, with payments and securities exchanged within a predictable time frame.
Understanding Rolling Settlement
Rolling settlement means that each trading day is treated independently, and trades executed on that day follow their own settlement schedule.
- The system runs continuously from one trading day to the next
- Trades are cleared based on net obligations from that specific day
- It helps maintain a transparent and efficient settlement process
Settlement Timeline: T+1
As per the current framework in India:
- Trades follow a T+1 settlement cycle
- “T” is the day the trade is executed
- “+1” means the trade is settled on the next working day
For example:
- If you trade on Monday, settlement will occur on Tuesday (unless Tuesday is a trading holiday)
Accounting for Holidays
- Settlement days do not include weekends or NSE/BSE holidays
- If a holiday falls on T+1, the settlement shifts to the next working day
This ensures the buyer receives their shares and the seller gets their funds on time—on the next valid trading day.
What If...
| Scenario | Outcome |
|---|
| I buy shares on Friday | Shares will be settled on Monday (T+1), unless Monday is a holiday. |
| T+1 is a public holiday | Settlement happens on the next working day. |
| I sell on a day with heavy trading volume | The T+1 cycle still applies, unless there's a market-wide issue. |
| I want to sell the shares I just bought | You must wait until they are settled in your Demat (T+1 day) to avoid short delivery. |
Tip: Always check the trading holiday calendar when planning back-to-back trades to avoid unexpected settlement delays.
Last updated: 24 Jun 2025
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