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Information about Delivery Versus Payment

Delivery versus payment is used to classify a security trade. DVP trading is defined as transactions in which payment and transfer of the subject security occur simultaneously where:
  • little or no credit risk exists in the settlement process (e.g. central depository system such as DTC or Euroclear), and
  • the settlement period is the normal spot settlement period for the product and market, and
  • the transaction does not create credit risk after settlement.
Any transaction entered into with a negotiated settlement period beyond the normal cash settlement date for the particular product and market and any transaction with a settlement date more than 45 days from trade date is not considered a DVP transaction.

There is also non-DVP trading.
A stock trader or a stock investor is an individual or firm who buys and sells stocks or bonds (and possibly other financial assets) in the financial markets.

Stock trader versus stock investor


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DTC can stand for one of several things:
  • Danish Touring Car Championship, Danish touring car racing series
  • Data Trouble Code, in software engineering for diagnostic purposes stored error codes (e.g. automotive).

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Euroclear is an independent Brussels, Belgium-based financial services company that specializes in the clearing and settlement of securities.

It was founded in 1971 as part of J.P. Morgan & Co.
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Aspinwall Classification System (Leo Aspinwall, 1958) classifies and rates products based on five variables:
  1. Replacement rate (How frequently is the product repurchased?)
  2. Gross margin (How much profit is obtained from each product?)

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market is a social arrangement that allows buyers and sellers to discover information and carry out a voluntary exchange of goods or services. It is one of the two key institutions that organize trade, along with the right to own property.
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Non-DVP trading is defined as securities trading where a client custodian will have to release payment or deliver securities on behalf of its client before it is certain that it will receive the counter-value. There is incurring settlement risk.
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