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Finance GlossaryT-Plus Settlement (T+1)
T-Plus Settlement (T+1)
Definition of T-Plus Settlement (T+1)
T-Plus Settlement is a settlement system in trading. The fund transfer takes place one business day after the trade. For instance, if you buy a stock on Monday, the transaction is completed on Tuesday. The T+1 system reduces risk in settlements and improves liquidity. It ensures that investors can access their money on securities faster.
Related Terms
Minority Interest
Minority Interest refers to the portion of a subsidiary’s equity that is owned by shareholders other than the parent company. It represents the non-controlling stake in the subsidiary’s profits and net assets. It is shown separately in consolidated financial statements to reflect ownership accurately.
Open Interest
Open Interest is created when a new seller and a new buyer enter into a fresh contract. It represents the total number of active futures or options contracts that are still open and not squared off on an exchange like the NSE. Open Interest helps traders understand market participation, liquidity, and sentiment in stocks or indices such as the Nifty. Rising Open Interest with rising prices indicates bullish strength, while rising Open Interest with falling prices signals bearish sentiment.
Ex-Dividend Date
The ex-dividend date is the trading day on and after which a new buyer of the stock is not entitled to any dividends. Most traders say that a stock has gone ex-dividend when this happens.
Traditionally, the ex-dividend date is set a day before the record date when a company evaluates its records for existing shareholders. If a trader buys a stock that has gone ex-dividend from a seller, the one who'll get dividends is the seller.
Traditionally, the ex-dividend date is set a day before the record date when a company evaluates its records for existing shareholders. If a trader buys a stock that has gone ex-dividend from a seller, the one who'll get dividends is the seller.
Equity Delivery
In equity delivery, shares are delivered to an investor’s Demat account after the settlement period. That’s why it is called equity delivery. However, equity delivery is also known as delivery trading and long term investing.
For example, let’s say you place an order for 10 HDFC shares on Tuesday with a view of holding onto them for the long term. The trade will be settled on Thursday shortly after which the shares will be delivered to your Demat account.
For example, let’s say you place an order for 10 HDFC shares on Tuesday with a view of holding onto them for the long term. The trade will be settled on Thursday shortly after which the shares will be delivered to your Demat account.
Takeover Bid
A takeover bid is an offer that an individual, company, or investor makes to acquire a controlling stake in another company. A takeover bid can be friendly, when the approval of the board is sought, or hostile, where the bid is placed directly to the shareholders without the consent of the management. Takeover bids are mostly used for expansion, strategic growth, or restructuring purposes.
Lead Underwriter
The lead underwriter is a financial institution that is in charge of ensuring that an IPO is successful on the primary market. Companies may also hire lead underwriters to carry out a FPO.
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