[SpicyLemonZest]

It's a silly theory, but I wouldn't say I'm surprised, because the entire idea just doesn't make a ton of sense from first principles. If the NYSE has some stocks for sale, and I have money to spend on those stocks, why is it more complicated than buying a water bottle off Amazon or a Netflix subscription? There are good answers, sure, but they're long and complicated and it's entirely fair to be suspicious when you first hear them.

I think this is really under-appreciated as an argument in favor of lower settlement times. There's a lot of indirect societal costs in having the financial system look so strange.

[jfim]

Since neither Amazon or Netflix allow you to pay cash, the transaction settles much later. You get the appearance of immediate settlement, not unlike the stock market in normal conditions.

I'd assume if one were to check out from Amazon with say several millions of dollars of goods, there would be some phone calls being done in the back offices.

[mikestew]

why is it more complicated than buying a water bottle off Amazon or a Netflix subscription?

It's not. This is one of those "tell me what happens when you navigate to a URL" interview questions. What really happens when you order something off Amazon? Is there a float? Is there delayed settlement? Does Amazon at some point have to settle with another party? And the answer to all of those questions is "yes". We could continue to deconstruct your analogy, but I think the point is made.

Sibling comment made an analogy to buying a car. I believe if one really tore into the question, one might find that just about the only financial transaction that doesn't work with many similarities to the stock market is handing a fiver to the clerk at your local convenience store. (And someone that knows more about retail than I do can tell me how wrong I am about that.)

[maratc]

You're very much on the point, I'd just add that a fiver in a cash register is both an asset and a liability, as anyone with a gun-like object might come through the door and take it. It's only when that fiver, together with the rest of cash, is taken at the end of the day to the bank and deposited there that your $5 grocery transaction can finally be considered settled.

[u678u]

> water bottle off Amazon or a Netflix subscription

The first is a trivial item, the second an item of zero marginal cost that doesn't matter if payment fails.

A better example is settlement time of a car or house. If you buy a car maybe you can drive away today, but it takes a while before your ownership is fully registered.

[benglish11]

I once bought a car, but did not have a check for the deposit on me. They let me drive off the lot with the car and I dropped off the check the next day so this is a pretty decent analogy. If for some reason I was unable to deliver the check I would be returning the car to them at a reduced value.

[maratc]

The real question is, when was the car stopped being their property and started being yours (so you could resell it for cash, for example).

If the title transfer took 10 days, your transaction settled in T+10, even though you might think it's instantaneous.