Business Day

What is Business Day?

It is a well-known time measure unit in financial markets that basically refers to a day in which operations of business take place. Typically, a business day is considered to be Monday to Friday from 9 AM to 5 PM and doesn’t include weekends and public holidays.

In the securities Industry, any day on which the financial markets get open for trading is regarded to be the business day.

Example of Business Days

Let’s assume that you want to deposit a cheque that needs instant clearing. Based on the cheque’s amount and the issuer’s location, it can take anywhere between 2-15 business days to get it cleared. And, these days don’t comprise mandatory public holidays and weekends, which can increase the time of clearance even more.

Business days are also worth using when it comes to conveying when an item will be delivered. Suppose there is a product that has to be delivered within 3 business days. This could create a massive difference if a weekend or any public holiday is involved.

Understanding Business Days

In case you wish to conduct an international transaction in financial markets, you must be aware of the business days as they vary from a country to country. Although most of the countries work approximately 40 hours per week during the weekdays, there is still a huge variance to keep in mind.

For instance, Middle Eastern countries consider Sunday to Thursday as their workweek. And, in some other countries, Monday to Saturday is the workweek.

Other Common Consideration

There are other typical business day considerations as well that generally arise when multinational entities set their feet in international transactions that require extra business days to settle the work, primarily if two countries work according to different workdays.

Several financial instruments and contracts also have a gamut of settlement time periods that may Range anywhere from a single day to more in the financial phrasing to other lengths that require 3 business days. Often, Market liquidity and sophistication govern transaction settlement periods.

In several ways, enhancements in capabilities and communication channels blur the traditional and basic business day as it has now become possible to conduct a business 24/7 through electronic means.