What is settlement cycle?
Settlement cycle refers to the period in which the buyer and seller of shares settle their obligation to each other. In India, we follow the T+2 settlement cycle.
So, if the transaction takes place on Monday, the settlement will be done on the second trading day, which is Wednesday, if the transaction takes place on Tuesday, the settlement will take place on Thursday, so on and so forth.
What is rolling settlement?
In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. Trades in the rolling settlement are settled on a T+2 basis i.e. on the 2nd working ...
What is meant by ‘X’ Settlement or Cash Settlement?
Cash settlement occurs when a client has purchased equity shares in delivery, but the exchange failed to deliver the shares on T+2 days. There are two ways settlements happen if there is a delivery shortage: Internal Settlement: Internal settlement ...
What is T+2 settlement?
T refers to the day on which the transaction took place. This means that the buyer must pay the amount in full to the seller by the second trading day after the transaction and the seller must provide the shares to the buyer by the second trading day ...
What is End of Day (EOD) MTM settlement?
It is mandatory for derivative positions to be settled in cash on a daily basis. At the end of each day, settlement of open derivative positions takes place at the exchange provided closing price. The difference between the opening price and the ...
Is MTM settlement applicable for options trading?
Yes, but the MTM process is applied only for the sellers of the options contract.