Settlement Types in the Egyptian Exchange
What is Settlement?
Settlement is the process that occurs after a buy or sell trade is executed on the stock exchange. Simply put: it's the moment when money is actually transferred from your account (if buying) or to your account (if selling) and shares are officially transferred.
The letter T stands for Trade (the day the transaction is executed), and the number after it represents the number of business days the settlement takes.
---
Settlement Types
T+0 — Same-Day Settlement
- You sell and receive your funds on the same trading session
- Commission is higher than T+2
- Suitable for those who need immediate liquidity or do day trading
- Not all brokers offer this option
T+1 — Next Business Day Settlement
- Funds are settled on the next business day after selling
- Commission is moderate — between T+0 and T+2
- A middle-ground option for those who want quick but not immediate liquidity
T+2 — Standard Settlement
- This is the default system in the Egyptian Exchange
- Funds are settled two business days after the sell order is executed
- Commission is the lowest
- This happens automatically if you don't specify a settlement type
---
Practical Comparison
| Type | When are funds settled? | Commission | Best for |
| T+0 | Same day | Highest | Day traders — buying and selling daily |
| T+1 | Next business day | Moderate | Those who need quick liquidity |
| T+2 | After 2 business days | Lowest | Investors — no rush for cash |
---
Important Notes
Settlement is NOT stock-specific
The difference is not about which stock you trade — all stocks on the Egyptian Exchange can be settled with any type. The difference lies in:
- The type of sell order you choose when executing
- Your broker — not all brokers offer T+0
- Commission rates vary by settlement type
What happens during the settlement period?
- Shares are transferred from the seller's account to the buyer's account through Misr for Central Clearing, Depository and Registry (MCDR)
- Funds are transferred simultaneously (Delivery versus Payment — DVP system)
- If you buy a stock, you cannot sell it before settlement is complete (unless your broker offers credit)
Practical Advice
- If you're a long-term investor: T+2 is best — lower commission and no need for immediate liquidity
- If you're a day trader: T+0 or T+1 so you can reuse funds the same day or next day
- Ask your broker about actual commission rates for each type before deciding
---
Summary
Settlement in the Egyptian Exchange comes in 3 types: T+0 (immediate), T+1 (one day), T+2 (two days). The choice depends on your liquidity needs and willingness to pay higher commissions. When in doubt, T+2 is the safest and cheapest option.