What is Trade life cycle ?

Question

Accepted Answer

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

Trade initiation: The process begins when a trader decides to buy or sell a financial instrument.
Order placement: The trader places an order with a broker or through an electronic trading platform.
Order execution: The order is matched with a counterparty and executed at the prevailing market price.
Trade confirmation: Both parties receive a confirmation of the executed trade, including details such as quantity, price, and settlement date.
Trade settlement: The actual exchange of funds and securities takes place, typically through a clearinghouse or custodian.
Post-trade activities: This includes activities like trade reconciliation, margin calculations, and regulatory reporting.
Trade lifecycle can vary depending on the type of financial instrument and market.
For example, in the case of equities, the trade settlement is typically T+2, meaning the exchange of funds and securities occurs two business days after the trade execution.

Accepted Answer

Trade execution

Trade clearing
Trade settlement
On going position and risk management

Accepted Answer

4 cycles trading any securities 1) pre check before order placement like do client have sufficient margin to buy or sufficient securities to sell on market. 2) order placement. 3) order matching. 4) trade settlement .

What is Trade life cycle ?

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