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What is the settlement cycle or rolling settlement?

The settlement cycle is the period in which the trade is settled. The Stock exchanges in India follow the T+2 rolling settlement cycle. ‘T’ is referred to as a ‘Trading Day’ and stocks bought by you today are deposited in your Demat account in T+2 days.  So the stocks bought by you on:

  • ‘Monday’ are deposited in your Demat account on ‘Wednesday’

  • ‘Wednesday’ are deposited in your Demat account on ‘Friday’

  • ‘Friday’ are deposited in your Demat account on ‘Tuesday’

As you can see the stocks bought on ‘Monday’ and ‘Wednesday’ are settled normally in T+2 days but the stocks bought on ‘Friday’ are settled in T+3 days as there is a trading holiday on Saturday and Sunday.   Note: ‘T+1’, ‘T+2’ are normal trading days.

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