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Investing & the Stock Market vocabulary · Orders & Trading

Settlement

Meaning in investing & the stock market, with examples

/ˈsetlmənt/nounCommon term

In investing & the stock market, settlement means: The final step of a trade, when the buyer pays the money and the seller delivers the securities, making the transfer of ownership complete.

In Turkish: takas, takas ve mutabakat, işlemin tamamlanması

How it is used

Settlement times are written as T+1 or T+2, meaning one or two business days after the trade date (T). Borsa Istanbul and many European markets use T+2 for shares; the US moved to T+1 in 2024. A trade that does not settle on time is a 'failed settlement'.

Example sentences

  1. You can sell the shares today, but the cash will only be available after settlement on T+2.

  2. The move to shorter settlement cycles reduces risk for both buyers and sellers.

Common collocations

  • settlement date
  • T+2 settlement
  • settlement cycle
  • failed settlement
  • clearing and settlement
  • brokerage accountAn account at a broker that holds your cash and investments and lets you buy and sell shares, bonds, funds and other securities.
  • brokerA person or firm that buys and sells shares and other securities for clients, usually in exchange for a fee called a commission.
  • ex-dividend dateThe first trading day on which a share is sold without the right to the next dividend. Buyers on or after this date do not receive that payment.
  • market orderAn instruction to buy or sell a security immediately at the best price currently available, without setting a price limit.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Orders & Trading

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This page explains English vocabulary for learners. It is not financial advice.