The settlement is similar to the sellers who have delivered the shares. They get the payment from the stock exchange. The whole process of settlement of shares and money is managed by stock exchanges through the clearing house. The clearing house has been formed especially to ease the move and ownership of shares and guarantee the procedure of settlement takes place easily.
The stage within which the settlement is made, that is, the phase within which buyers receive their shares and sellers receive their money is called a settlement cycle. It is probable to by and sells within a settlement cycle numerous times, which is what traders do. They settle only their net outstanding positions at the ending of the settlement cycle.
For example, you have bought 100 HLL, sold 50 HLL. You have bought 100 Infosys and 50 Gujarat Ambuja. You have sold 150 Gujarat Ambuja. Then at the end of the settlement cycle, you will receive 50 shares of HLL and 100 of Infosys and get money for selling a net 100 shares of Gujarat Ambuja. In other words, the settlement is made for the net exceptional positions at the end of the cycle.
Formally, therefore, a settlement cycle refers to a calendar according to which all purchase and sale dealings done within the dates of the cycle are settled.
Home >>settlement
Settlement is just the method whereby payment is made by all those who have made purchase and shares are delivered by all those who have made sales. After you have bought or sold shares through your broker the deal is said to have settled. Meaning the buyer has to receive his shares and the seller has to receive his money. This is called settlement. The stock exchange ensures that buyers who have paid for the shares purchased receive the shares. In short the stock exchange ensures the settlement.
Settlement is just the method whereby payment is made by all those who have made purchase and shares are delivered by all those who have made sales. After you have bought or sold shares through your broker the deal is said to have settled. Meaning the buyer has to receive his shares and the seller has to receive his money. This is called settlement. The stock exchange ensures that buyers who have paid for the shares purchased receive the shares. In short the stock exchange ensures the settlement.
