What is 'Rolling Settlement'

Rolling settlement is the process of settling security trades on successive dates so that trades executed today will have a settlement date one business day later than trades executed yesterday. This contrasts with account settlement, in which all trades are settled once in a set period of days, regardless of when the trade took place.

BREAKING DOWN 'Rolling Settlement'

Securities that are sold in the secondary market typically settle three business days after the initial trade date. Within a portfolio, if some stocks are sold on Wednesday, they will settle the following Monday. Stocks in that same portfolio that are sold on Thursday will settle on the following Tuesday. Finally, if some of the stocks are sold on Friday, they will settle the following Wednesday. When securities are sold and settled on successive business days, they are said to be experiencing a rolling settlement.

RELATED TERMS
  1. Settlement Date

    1. The date by which an executed security trade must be settled. ...
  2. Cash Transaction

    A transaction that is settled with cash on the same day as the ...
  3. Regular-Way Trade - RW

    A type of trade that is settled through the regular settlement ...
  4. Settling Price

    The price used daily by clearing houses to clear all trades and ...
  5. Settlement Period

    The period of time between the settlement date and the transaction ...
  6. Window Settlement

    A form of settlement between dealers whereby trades are settled ...
Related Articles
  1. Investing

    What is a Settlement Date?

    A settlement date is the day a security trade must be settled.
  2. Investing

    The Foundation Of Structured Settlements

    This annuitized payment setup should be arranged through impartial attorneys and tax agents.
  3. Personal Finance

    A Guide To Debt Settlement

    Find out how you can negotiate your way to a lower debt load by paying up front.
  4. Investing

    What Do T+1, T+2, and T+3 Mean?

    T+1, T+2, and T+3 denote the day settlement occurs on a transaction.
  5. Taxes

    The Truth About IRS Tax Settlement Firms

    These companies claim that they can reduce or even eliminate what you owe to the IRS. Find out the facts behind this alluring fiction.
  6. Managing Wealth

    Profit From Unwanted Life Policies With Life Settlement

    With a life settlement you could cash in on your policy money now.
  7. Trading

    Credit Default Swaps: What Happens In A Credit Event?

    The credit crisis of 2008 prompted important changes to the settlement of credit default swaps.
  8. Investing

    Goldman Sachs Agrees to $5 Billion Settlement (GS)

    The Department of Justice announced Monday that Goldman Sachs Group Inc. (GS) will pay $5 billion to settle state and federal claims related to its handling of mortgage-backed securities in the ...
  9. Insights

    Inside National Payment Systems

    Investopedia explains: The global interconnection of U.S. payment systems makes commerical and financial transfers possible.
  10. Investing

    BP Stock Rises After $175M Oil Spill Settlement (BP)

    The $175 million settlement also eliminates uncertainty surrounding the company's future liabilities as it relates to the spill, reported Bloomberg.
RELATED FAQS
  1. When is a share purchase marked as 'settled' by a brokerage?

    Understand the process of purchasing stock, including ordering, clearing and settlement, and learn when a stock trade is ... Read Answer >>
  2. Do I own a stock as of the trade date or the settlement date?

    When it comes to buying shares, there are two key dates involved in the transaction. The first date is the trade date, which ... Read Answer >>
  3. Will a debt settlement program affect my credit score?

    Understand the impact of negotiating debt settlements on your credit score, and learn what factors determine the size of ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center