Post-Trade Processing

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DEFINITION of 'Post-Trade Processing'

After a trade is complete, it goes through post-trade processing, where the buyer and the seller compare trade details, approve the transaction, change records of ownership and arrange for the transfer of securities and cash. Post-Trade processing is especially important in markets that are not standardized such as the over-the-counter (OTC) market.

BREAKING DOWN 'Post-Trade Processing'

Post-trade processing is important in that it verifies the details of a transactions. Markets and prices move fast so at the time transactions must be executed quickly. Since many securities trades are done over the phone from party to party the ability for mistakes and human error exists. Post-trade processing allows the buyer and seller of securities to verify trade details or sort out any mistakes.

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