A general trade life cycle includes the various stages from order placement to execution and settlement.
This life cycle is described step-by-step as follows: Pre-execution: An order is placed at this stage.
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Execution and booking: When the order is matched and executed, it converts it into a trade.
At this stage, the contract between counterparties is matured.
Confirmation: This is where both counterparties agree to the particulars of the trade.
Post booking: This stage is concerned with various scrutiny and verification processes required to ascertain the correctness of the trade.
Overnight (end-of-day processing): End-of-day processes include report generation, profit and loss calculations, and various risk calculations.
This life cycle is also shown in the following screenshot: Trade life cycle In all the aforementioned processes, many people and business functions are involved.
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Most commonly, these functions are divided into functions such as front office, middle office, and back office.
In , you are introduced to some concepts that are essential to understanding the strict and necessary rules and regulations that govern the financial industry.
These ideas will help you understand the scenarios described.
Key Points to Remember
- Trade life cycle A general trade life cycle includes the various stages from order placement to execution and settlement.
- This life cycle is described step-by-step as follows: Pre-execution: An order is placed at this stage.
- Execution and booking: When the order is matched and executed, it converts it into a trade.
- At this stage, the contract between counterparties is matured.
Conclusion
Trade life cycle represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.