What is Trade life cycle

Question

Accepted Answer

Trade life cycle refers to the stages involved in the execution and settlement of a trade.

Trade initiation: The trade is initiated by a buyer and a seller agreeing on the terms of the transaction.
Order placement: The buyer or seller places an order with a broker or exchange.
Order matching: The broker or exchange matches the buy and sell orders.
Trade execution: The trade is executed at the agreed price and quantity.
Trade confirmation: Both parties receive a confirmation of the trade details.
Clearing and settlement: The trade is cleared and settled, involving the transfer of funds and securities.
Trade reconciliation: The trade details are reconciled between the parties involved.
Trade reporting: The trade is reported to relevant regulatory authorities.
Trade lifecycle events: Any subsequent events like modifications, cancellations, or exercises are processed.

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