What does the settlement cycle mean?

What does the settlement cycle mean?

The settlement cycle denotes the duration required for a trade to be completed. On Indian security exchanges, this cycle for all traded items is termed as T+1 day, where T denotes the trading day. In the event of a settlement holiday, the settlement process extends by an additional day. 

For example,

In the Equity segment:

·        When purchasing shares on Monday (T day), they are credited to your demat account by Tuesday (T+1 day).

·        If selling shares on Monday (T day), the sale proceeds are credited to your trading account by Tuesday (T+1 day). However, withdrawal of these funds is permitted only after Tuesday evening.

In the F&O segment:

·        Upon initiating a long/short futures or short position on Monday (T day), any credit obligation like Mark to Market (MTM) or premium is settled to your trading account by Tuesday (T+1 day), with withdrawal possible after Tuesday evening. 

·        Debit obligations from your trading account are settled on the same day, i.e., T day.


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