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A Stock Exchange term for the days set aside for the settlement of accounts (bargains between members). They are also called ‘settling days’. Transactions in gilt-edged securities are accounted for daily, other transactions are settled fortnightly on alternate Mondays. Clients receive statements on preceding Thursdays to give them time to send in the necessary money. Accounts may be carried over from one period of account to another – a payment is made for this privilege. known as contango, or the contango rate. (Strictly speaking, this applies to transactions where the buyer does not wish to take up the shares at the particular time. i.e. bull transactions.) Where it is a question of the non-delivery of shares, e.g. where the client has not yet obtained them and does not wish to at prevailing prices, the rate is known as backwardation.
Reference: The Penguin Business Dictionary, 3rd edt.
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