The stock market thrives on a complex ecosystem of buyers and sellers constantly exchanging securities. But have you ever wondered what happens after you click "buy" or "sell" on your trading platform? This is where the crucial processes of clearing and settlement come into play. They ensure a smooth and secure transfer of ownership and funds, forming the invisible engine that keeps the stock market running efficiently. Decoding the Process: Clearing vs. Settlement Let's break down the two key stages of Clearing and Settlement: Clearing: Clearing acts as the intermediary, verifying the details of each trade, calculating any margins or fees, and ensuring the financial capability of both parties. It's like a meticulous accountant double-checking all the numbers before finalizing t
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