What is Trading holiday and Settlement Holiday?

What is Trading holiday and Settlement Holiday?

To get a basic understanding of the settlement cycle, let’s first understand some basic terms:


  1. T-day: The trading day is the day when a buy or sell order is placed and executed.
  2. T + 1 day: T + 1 day is the next working day of exchange from T Day.
  3. Settlement Day: Settlement Day is the day when the trade executed is settled by providing delivery of shares to the buyer and funds to the seller. Trades are settled on T + 1 day except in case of a settlement holiday.
  4. Settlement Holiday: A settlement holiday is a day when you can do regular trading, but the settlement of the previous day's trade of stock and funds will not take place on that day due to a bank holiday, the closure of clearing corporations, or both. You can see the list of settlement holidays here.

TRADING HOLIDAY

SETTLEMENT HOLIDAY

Trading holidays are days when stock exchanges are not working, and due to this, clients cannot buy or sell stocks as regular trading days.

A settlement holiday is a day when you can do regular trading, but the settlement of stock and trade will not take place on that day due to a bank holiday, the closure of clearing corporations, or both.

They are declared by exchanges to celebrate national events and festivals as 2nd Oct., 15th August, Diwali, Saturdays, and Sundays.

Settlement holidays in India are on all Saturdays, Sundays, bank holidays, and NSE holidays.

RELATED FACTS: -

  • You can see the list of Trading holidays,here.
  • You can see the list of settlement holidays, here.
  • Trading and settlement holidays may or may not coincide. As on a trading holiday, it is always a settlement holiday too, but on a settlement holiday, it may or may not be a trading holiday.
    Learn more about, The impact of the settlement holiday.