© 2015 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Cash Settlement


When a trade is made, it gets "settled". See regular way. Cash settlement is not the normal way trades get cleared. And to be clear, when a trade is made, it involves a lot more than "sold at $103.24". Papers must be signed. Documents must be filed. Notations of commissions and other risk factor issues must be mentioned. Much of this happens electronically today but legally for a trade to be good/ accepted/ recognized by the law, it must be settled properly.