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Trade life cycle


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Just like any other product even a trade has its life cycle involving several steps, as those with a career in Capital Markets know.

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Trade life cycle

  1. 1. Trade Life Cycle The Process of Buying & Selling
  2. 2. 2 Agenda In this session, you will learn about: • What is a Trade Cycle? • What are the Steps involved in a Trade Life Cycle?
  3. 3. 3 What is a Trade Cycle?
  4. 4. 4 What is a Trade? What is a Trade? • Trade is a process of buying and selling any financial instrument. • Just like any other product even a trade has its life cycle involving several steps, as those with a career in Capital Markets know.
  5. 5. 5 Overview of the Process What are the Steps involved in a Trade Life Cycle?
  6. 6. 6 • This is a process of client acquisition in which HNIs or Institutional clients are introduced to various investment products or vehicles. • These vehicles or products are available with an Investment Manager or Bank by whom the client’s investments are managed. • The investments are collectively called a Mutual or a Hedge fund. The Sale Process
  7. 7. 7 • This is the process of placing an order in the market. • Trade Initiation and Execution can be done both in Order and Quote-driven markets. • This depends on the choice of a marketplace and on the external platform. • Once the order is placed and it gets matched, the trade is said to be executed. Trade Initiation and Execution
  8. 8. 8 • Trades are then booked internally in an FO system for it to flow down to the operating systems. • It is booked in a Risk Management System (RMS) Trade Capture
  9. 9. 9 • Reference data team set up the static and dynamic details which help middle office teams to validate the trade, before releasing instructions into the market. Trade Validation and Enrichment SSIs Security Identifier Currency Counterparty Holiday Calendar Markets
  10. 10. 10 • This is an extremely critical step for the trade settlement. • Trade details and SSIs are agreed with the counterparty at least a day prior to settlement date. • Confirmation via depositories like Euro clear/DTCC Trade Confirmation
  11. 11. 11 • This is the process of simultaneous exchange of cash versus securities for a security trade or cash versus cash for a Derivative trade. Trade Settlement
  12. 12. 12 • Reconciliation involves matching ledgers against statements to ensure correct accounting of all trade booked. Reconciliation A Pictorial representation of the steps.
  13. 13. 13 • If you are looking for the Capital Market Courses, get to know more about the trade lifecycle through a focused training and this presentation could be a good starting point. Conclusion
  14. 14. Thank you Mumbai | Bangalore | Pune | Chennai | Thane | Hyderabad | Hyderabad | Delhi | Gurgaon | Ahmedabad ACCREDITED TRAINING PARTNER: