As per Current system either buyer pay or not, seller is guaranteed of cash, since broker has to pay on his own account. Is DVP is simply transferring settlement risk of the broker to the seller.
Can anyone explain on my 1st paragraph
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first of all can you buy something saying i will settle it on T+3. No, right?Kaish86 wrote:If i sell something at profit, and on 3rd day during settlement if the share price is not favouring buyer's earlier decision and he refuses to settle, will the original trade is cancelled. Can't seller get his money for his original decision. This is unfair.
As per Current system either buyer pay or not, seller is guaranteed of cash, since broker has to pay on his own account. Is DVP is simply transferring settlement risk of the broker to the seller.
Can anyone explain on my 1st paragraph
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Kaish86 wrote:If i sell something at profit, and on 3rd day during settlement if the share price is not favouring buyer's earlier decision and he refuses to settle, will the original trade is cancelled. Can't seller get his money for his original decision. This is unfair.
As per Current system either buyer pay or not, seller is guaranteed of cash, since broker has to pay on his own account. Is DVP is simply transferring settlement risk of the broker to the seller.
Can anyone explain on my 1st paragraph
definitely something is wrong.niru wrote:
Compensation amount = qty x Max(0,P) + 0.8% of transaction value
P = sale price - highest trade price between trade date settlement date
niru wrote:Trade can be cancelled.
No security movement from seller's account.
But, Seller will be compensated for the 3 day price loss and opportunity loss.
CDS will charge this compensation from buy broker, buy broker may charge it from buyer.
Compensation amount = qty x Max(0,P) + 0.8% of transaction value
P = sale price - highest trade price between trade date settlement date
All in all the DVP adopted by established stock markets globally provides safety features covering buyers and sellers interests which is nonexistent at the CSE at present.niru wrote:niru wrote:Trade can be cancelled.
No security movement from seller's account.
But, Seller will be compensated for the 3 day price loss and opportunity loss.
CDS will charge this compensation from buy broker, buy broker may charge it from buyer.
Compensation amount = qty x Max(0,P) + 0.8% of transaction value
P = sale price - highest trade price between trade date settlement date
Sorry, P should be as follows
P = sale price - Lowest trade price between trade date settlement date
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