what is rolling settlements in stock market?

In finance, rolling settlements refer to a system in which trades in financial markets are settled on a continuous basis, rather than all at once at the end of a trading period. This means that trades are settled on a "rolling" basis as they occur, rather than waiting for a specific settlement date.

In the context of securities trading, rolling settlements refers to a system where trades are settled on T+2 days (i.e. 2 days after the trade date) as opposed to T+30 days (end of the month) or T+14 days (end of the fortnight)

Rolling settlements are used in many financial markets, including stock markets, commodity markets, and currency markets. The goal of rolling settlements is to reduce the risk of default and to increase efficiency by allowing market participants to manage their financial positions on a more frequent and timely basis.

Rolling settlements also allow for greater flexibility in trading, as traders can enter and exit positions more quickly, and it reduces the risk of market manipulation by large players who may try to influence the market by holding on to large positions till the settlement date.

In summary, rolling settlements refer to the continuous and timely settlement of trades in financial markets, as they occur, which helps to reduce the risk of default, increase efficiency, and provide greater flexibility for market participants.