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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

DVP

Definition:

It stands for "Delivery v. Payment."

To understand it, you have to understand the awkwardness of selling stock. The buyer doesn't want to pay cash until they have the stock. The seller doesn't want to let go of the stock until they have the cold, hard cash. The obvious answer is to make sure that the handing over of the stock and the cash happen at the same time.

That's DVP... but how does that happen? In this situation, a clearing agent makes things a little less tense by being the middleman. He or she ensures that the buyer gets the stock and the seller gets their cash.

Crisis averted.