Trading and Settlement

Definition ∞ Trading and settlement collectively refer to the complete lifecycle of a financial transaction, from the initial agreement to buy or sell an asset to the final transfer of ownership and funds. Trading involves the execution of orders on an exchange or directly between parties. Settlement is the subsequent process of finalizing the exchange of assets for payment. Efficient processes are vital for market liquidity.
Context ∞ In digital asset markets, news often highlights how blockchain technology is transforming trading and settlement processes by enabling near-instantaneous and immutable transfers. The efficiency of these operations is a key differentiator for cryptocurrencies compared to traditional finance, which often involves multi-day settlement cycles. Discussions frequently center on improvements in speed, transparency, and cost reduction.