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Clearing and Settlement Explained: Where Does Your Money Go After a Trade? | Canadian Investing
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In this episode, we explain why your trade doesn't truly complete the second you click. Behind every buy and sell sits a clearing and settlement machine — netting obligations, moving shares through CDS, and transferring cash — and even at today's T+1 standard, that machinery needs its day to guarantee nobody's left holding the bag.
Key takeaways:
- Settlement moved from T+3 to T+2 to T+1 — speed has real trade-offs
- Clearinghouses net millions of trades so the system doesn't drown in…
The skinny
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