After you have bought or sold shares through your broker, the trade has to be settled. Meaning, the buyer has to receive his shares and the seller has to receive his money. Settlement is just the process whereby payment is made by all those who have made purchases and shares are delivered by all those who have made sales.

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The stock exchange ensures that buyers who have paid for the shares purchased receive the shares. Similarly, sellers who have delivered the shares receive payment for the same. The entire process of settlement of shares and money is managed by stock exchanges through the clearing house. The clearing house has been formed specifically to facilitate the transfer and ownership of shares and ensure the process of settlement takes place smoothly.

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In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net outstanding for the day. At present, trades in rolling settlement are settled on a T+2 basis, i.e. on the second working day. T+2 means that trades are settled two working days after the day the trade takes place. For instance, trades taking place on Monday are settled on Wednesday, Tuesday's trades settled on Thursday and so on.

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It's possible to buy and sell within a settlement cycle many times, which is what traders do. They settle only their net outstanding positions at the end of the cycle.

Eg. Bought 100 HLL, Sold 50 HLL

       Bought 100 Infosys

       Bought 50 Gujarat Ambuja , Sold 150 Gujarat Ambuja

Then at the end of the settlement cycle, you will receive 50 shares of HLL and 100 of Infosys and receive money for selling a net 100 shares of Gujarat Ambuja. In other words, the settlement is made for the net outstanding positions at the end of the settlement cycle.

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