We’re all about instant gratification. Streaming movies? Bring it on. Spray tans? Absolutely. But sometimes in this world, we have to wait for stuff. And in “rolling settlement” situations, that means we’re going to have to wait for our security trades to be settled.
Specifically, the term “rolling settlement” refers to successive trades that are settled on successive days. For example, if we sell a bunch of shares on a secondary market like the NYSE, it can take three business days for the trade to settle. Three business days. That’s longer than it’ll take Amazon to ship us that new fire pit we just ordered.
Anyway, the whole point here is to make sure that successive trades settle on successive days. So if we sell those shares on Monday, and they won’t settle until Thursday, then any trades we make on Tuesday won’t settle until Friday. In other words, our settlements are...rolling.
