hardConceptDesignScenarioSeniorStaffLead
If T+1 was hard, why is same-day or atomic settlement not simply one more day of compression?
6 min readUpdated 2026-08-15
Answer
Short answer
Because shortening the cycle removes the window that netting depends on. Settle each trade on its own and gross obligations replace net ones, so cash and stock must be in place trade by trade, sequencing starts to matter, and settlement risk is traded for intraday liquidity risk.
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Likely follow-ups
- What would a firm have to hold on its balance sheet to settle gross, and who pays for it?
- Why does a shorter cycle reduce the margin a clearing house needs, and by roughly what reasoning?
- How would you redesign an end-of-day position batch for a market where settlement happens continuously?
- If two counterparties are each waiting on the other's delivery, what breaks the deadlock under netting and what breaks it without?
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