Home > Glossary > Continuous Net Settlement

Meaning / Definition of

Continuous Net Settlement

Categories: Stocks,

In continuous net settlement, most securities transactions are finalized, or cleared and settled, within a brokerage firm. The firm's clients' orders to buy and sell are offset, or matched against each other, so that at the end of the trading day only those positions that haven't been offset internally remain to be settled. In a simplified example, all the shares of Stock A that a firm's clients bought are netted against all of the shares that its clients sold by reallocating ownership on the firm's books. Payment is handled in a similar fashion, as money is transferred from the buyers' account to the sellers'. If the firm has more buys than sells or the other way around, as is likely, it either delivers shares or receives them and makes a payment or receives it.Clearing and settlement for transactions that aren't offset are handled by an automated system through two branches of the Depository Trust & clearing corporation (DTCC), the national securities clearing corporation (NSCC), and the depository trust company (DTC).

Featured term of the day

Definition / Meaning of

Net Asset Value (NAV)

Categories: Finance,

The NAV is the dollar value of one share of a fund. It's calculated by totaling the value of all the fund's holdings plus money waiting investment, subtracting operating expenses, and dividing by the number of outstanding shares. A fund's NAV changes regularly, though day-to-day variations are usually small. The NAV is the price per share an open-end mutual fund pays when you redeem, or sell back, your shares. With no-load mutual funds, the NAV and the offering price, or what you pay to buy a share, are the same. With front-load funds, the offering price is the sum of the NAV and the sales charge per share and is sometimes known as the maximum offering price (MOP).The NAV of an exchange traded fund (ETF) or a closed-end mutual fund may be higher or lower than the market price of a share of the fund. With an ETF, though, the difference is usually quite small because of a unique mechanism that allows institutional investors to buy or redeem large blocks of shares at the NAV with in-kind baskets of the fund's stocks.

Most popular terms

1. Flash Mob
2. Unit Investment Trust (UIT)
3. NASD
4. Disclosure
5. Preference Shares
6. Employee Retirement Income Security Act Stock Drop Litigation
7. Use In Commerce
8. Hybrid Mortgage
9. Retired Directors Liability Policies
10. Additional Insured

Search a term

Keyword:

Browse by alphabet

ABCDEFG
HIJKLMN
OPQRSTU
VWXYZ#

Browse by category

Accounting
Banking
Bankruptcy Assistance
Bonds and Treasuries
Brokerages
Business and Management
Compliance and Governance
Credit and Debt
E-commerce
Economics
Estate Planning
Forex
Fraud
Fundamental Analysis
Futures
Global
Insurance
International Trade
Investing and Trading
Ipos
Legal
Loan and Mortgage
Mergers and Acquisitions
Mutual Funds
Operation and Production
Options
Patent
Personnel Management
Real Estate
Retirement and Pension
Statistics and Risk Management
Stocks
Strategies
Tax
Technical Analysis
Venture Capital