DEFINITION of 'Cash Transaction'
A transaction that is settled with cash on the same day as the trade.
BREAKING DOWN 'Cash Transaction'
Settling a trade using the cash transaction method differs from settling a contract on the settlement date, which in some cases involves agreeing on a price on the trade date but transferring payment on some date in the future (known as the settlement date). A cash transaction requires all aspects of a trade including delivery of payment to be finalized on the trade date.