Stock Market · Introduction to Stock Markets

Auctions, settlements, T+1

You buy a stock at 10 AM on Monday. When do you actually own it? When does the seller get paid?

T+1 settlement

India moved to T+1 in 2023. T = Trade date. +1 = one working day later.

Buy Monday → shares credited to your demat by Tuesday evening.

Sell Monday → money credited to your bank by Tuesday.

Before 2023, India was T+2. The US just moved from T+2 to T+1 in 2024. India led.

Who sits in the middle

A clearing corporation (NSCCL for NSE, ICCL for BSE) guarantees every trade. If one side defaults, the clearing corp absorbs the loss. This is why you can trade anonymously with strangers. The clearing corp is the real counterparty.

Auction session

If a seller fails to deliver shares by T+1 (short delivery), the exchange runs an auction at ~4:15 PM to buy those shares from someone else. The defaulting seller pays any premium. This is rare. 99.97% of trades settle cleanly.

> Futures contracts settle differently. Daily mark-to-market, with full settlement on expiry day (last Tuesday of the month for NSE). Don't confuse futures settlement with equity T+1.

Why T+1 matters to you

Sell today, reinvest tomorrow. Faster capital recycling means you don't have ₹1 lakh sitting idle for 2 days between trades.

99.97%NSE settlement success rate. Failures are extremely rare

T+1India's default equity settlement cycle. An optional same-day T+0 runs alongside it on the larger scrips

Takeaway. You don't own the shares the second you click buy. They arrive T+1. Plan your cash and demat around this cycle.