Questions tagged [settling-and-clearing]
For questions pertaining to the process of changing ownership between parities of assets usually regarding financial assets.
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questions
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74 views
Why are shares not settled on the same day? [duplicate]
I know the settlement process but I am still confused about why trades/shares are settled on T+2nd day. Why the settlement is not done at the very moment we make the trade?
Any clarification on this ...
0
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0answers
34 views
What settlement cycle does US HFT follow?
The other day, I heard someone talking about why HFT hasn't caught on in some international markets: the settlement cycle is too long. On the one hand, as long as settlement is above t+0, clearing ...
2
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0answers
28 views
Which CSD holds my stocks when bought on foreign exchange?
My question is best illustrated via an example:
My custodian (a.k.a my "bank") is located in Switzerland
I buy a share on the London Stock Exchange
The trade is cleared through LCH.Clearnet
...
14
votes
2answers
3k views
What does "Settling" mean in investing jargon?
When reading upon the definition of Chinese B-shares, I have a question about the following piece of text:
The term B-shares refers to equity share investments in companies based in China. These ...
2
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0answers
56 views
Why does a stock exchange need a clearing firm?
I see on wikipedia that "DTCC settled the vast majority of securities transactions in the United States and close to $1.7 quadrillion."
OK, so it seems that DTCC is the clearing house that ...
2
votes
1answer
61 views
How is it possible for a trade to be executed by a broker but cleared by another broker?
The Interactive Brokers U.S. Microcap Stock Restrictions page says:
Execution-only clients (i.e., execute trades through IBKR, but clear those trades elsewhere) may not trade U.S. Microcap Stocks ...
0
votes
1answer
101 views
What is the difference between having "book entry ownership" and being the "holder of record" of shares?
I am trying to understand the difference between "book entry ownership" of shares, and being the "holder of record" of shares. Apparently, the distinction is important in answering ...
0
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0answers
31 views
Acclererated settlment cycle: does t+0 benefit retail investors more than institutional investors?
In this report on accelerating the settlement cycle DTCC explains that a t+1 cycle could reduce the often unpredictable instrument-specific risks as well as order execution risks while still allowing ...
0
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0answers
42 views
Does any security market use real-time settlements?
I read on cnbc.com (mirror):
Tenev also advocated for real-time settlement instead of two-day settlement in order to help combat some of the chaos that occurred during the GameStop saga.
Does any ...
1
vote
1answer
93 views
Why do we need a depository and clearing center today?
I imagine that Back In The Day, the depository kept real securities in some safe and gave physical receipts about the presence of such a quantity of funds in such an account. Today, though, all ...
1
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0answers
474 views
What are the risks of buying OTC stocks whose transfer agent is not verified?
I noticed that some OTC stocks have the "Transfer Agent Verified" mark, while others do not.
For example, GoldMining Inc. (GLDLF) has it, while Gold Reserve, Inc. (GDRZF) does not. I've ...
3
votes
2answers
168 views
T, T+1, T+2 trading modes
Why are there different settlements modes T, T+1, T+2? why can't everything be settlement "today" T0? I understand what the difference is, but I don't understand why people did this and in ...
2
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0answers
586 views
How do I determine whether or not a stock is DTC-eligible?
From my understanding, exchange-listed stocks are all DTC-eligible (DTC meaning Depository Trust Company), so my question is more about the securities that trade over-the-counter.
How can I check ...
1
vote
1answer
75 views
What are the actual mechanics of an oil future trade, especially at the moment when the price goes negative?
I hope this is on-topic. It's not directly about personal finance, but it's not an academic economics question either. It is about what happens behind the scenes.
The question is motivated by the ...
-1
votes
1answer
106 views
How can you explain how international wire transfers work succinctly?
I'm interested in a conceptual explanation at the accounting level, i.e. who owes who what during the process.
I couldn't find anything on the web or on YouTube. It's very cumbersome to describe in ...
1
vote
1answer
85 views
Settlement dates re pattern day trading stocks
I've been trading options on a pattern day trading account for a couple of years and now want to trade stocks.
Options are settled overnight and funds available the next day. And day trading buying ...
1
vote
1answer
2k views
Using unsettled cash to buy securities on Interactive Brokers
From Interactive Broker's Availability of proceeds in a 'Cash' type account article:
Account holders who wish to have access to settled funds prior to the settlement day may do so by electing an ...
1
vote
0answers
56 views
Settlement Period for options pre 1993
I was reading Settlement Period and wondering what was the settlement duration for options pre 1993. For equity/etf, it seems it was five days.
So for options, was it four days ? , any verifiable ...
2
votes
1answer
188 views
Settle stocks on the same day [T] instead of [T+2/3]
Is it possible to have same day settlement on the stock markets by using more efficient processes and technology?
I know that the T+3 settlement was earlier replaced by the T+2 settlement process. ...
0
votes
1answer
1k views
Using unsettled funds to buy mutual funds in a margin account. Do I need to pay margin interest?
I'm trying to figure out security settling rules.
Say I have a margin account and I own 100 settled shares of ABC stock. I then sell my ABC shares and on the same day I use the unsettled funds from ...
0
votes
1answer
392 views
What is the settlement date for ACH?
DTCC requires that equities, municipal debt securities, corporate debt securities, and CDs settle T+2 and US Treasury & Agency debt securities settle T+1.
Is there any strict settlement date for ...
1
vote
3answers
890 views
Confusion with settlement time in stocks, forex, futures etc
I've been trading cryptocurrencies for a little while now, and recently I have been looking into stocks, futures and forex etc. During my research, I have run into a subject called settlement times. I ...
2
votes
3answers
3k views
What exactly is the difference between a clearing house and a counterparty clearing house?
I know this may sound like a stupid question but I have not yet found an adequate definition of the two that can clearly tell me the difference between them.
4
votes
3answers
1k views
Short an option - random assignment?
I'm still really new to options but I'm trying to understand this concept of assignment.
Let’s say I’m short a call of Microsoft at a strike of 80 set to expire in a quarter. Microsoft surges for ...
0
votes
1answer
893 views
Settlement of Shares Underlying a Covered Call Option
If I buy 100 shares of XYZ stock one or two minutes before selling one XYZ call option, would this call option be considered "covered", or would it be considered "uncovered" until the 100 shares ...
2
votes
2answers
9k views
What is street-side booking?
What is the meaning of the term "street-side bookings" in the context of broker operations? I suspect it has something to do with the Central Counter Party Clearing outlined in https://en.wikipedia....
0
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1answer
98 views
Is my spouse at risk for a joint filing in a year where I have settled a major debt? [closed]
I settled and wrote-off a major debt. This was recorded as 1099-E income. I incurred all of this debt under my name only, and she was not my spouse at the time I got into the debt. She was my ...
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vote
2answers
803 views
Understanding the T + 3 settlement days rule
If I:
Buy X at time T
Sell X at time T' where T' < T +3
Buy Y on T' with proceeds from sale of X.
Cannot sell Y before T' +3.
Ref:http://www.slideshare.net/mring33/using-java
Slide 29
It ...
2
votes
1answer
604 views
How to properly understand international wire transfers?
I am having a ridiculous time with international (inwards, to Australian account) wire transfers. They have about a 50% chance of succeeding, and I don't know who is being honest with me when things ...
