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Gross Settlement

Gross settlement is a measure requiring each trade in a share to be settled separately with the full cash and share amounts, without netting purchases and sales at broker level. Normally settlement nets purchases and sales at broker level.
Contents
  1. 1.Key points
  2. 2.How it works
  3. 3.Interpretation
  4. 4.Pitfalls
  5. 5.Official sources
  6. 6.Frequently asked questions

Key Points

  • For a share placed under gross settlement there is no netting; Borsa Istanbul uses gross settlement among the measures it applies to unusual price moves (including VBTS) and announces the decision on KAP.
  • Gross settlement aims to curb leveraged and short-term speculative trading.
  • selling quickly to raise cash becomes harder, and flexibility to close positions is reduced during the T+2 settlement period.

How It Works

to sell a share under gross settlement the shares must already be in the account, and to buy it the cash must be there. Shares bought on the same day cannot be sold before settlement completes, which in practice blocks intraday round trips.

Interpretation

Gross settlement aims to curb leveraged and short-term speculative trading. Volumes usually fall and price discovery slows while it is in force.

Pitfalls

selling quickly to raise cash becomes harder, and flexibility to close positions is reduced during the T+2 settlement period. Check the duration and scope of the measure in Borsa Istanbul’s KAP announcement.

Official Sources

Official regulation and sources the definition is based on.

Pages Where This Term Appears

Related Terms

Frequently Asked Questions

Gross settlement is a measure requiring each trade in a share to be settled separately with the full cash and share amounts, without netting purchases and sales at broker level.

to sell a share under gross settlement the shares must already be in the account, and to buy it the cash must be there. Shares bought on the same day cannot be sold before settlement completes, which in practice blocks intraday round trips.

Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy