What does the term "sign-and-trade" refer to?

The term "sign-and-trade" precisely refers to the process where a player signs a new contract with their current team and is then immediately traded to another team. This mechanism is commonly used in the NBA to allow teams to comply with salary cap restrictions while also facilitating player movement.

In contrast to simply signing a player or trading them after they've already signed elsewhere, the sign-and-trade acts as a simultaneous transaction that benefits both the player, who gets to choose their destination while securing a new contract, and the teams involved, which can fulfill contractual and cap obligations during the process. This strategy is particularly useful in retaining players who may otherwise leave in free agency, as it enables teams to gain assets in return rather than losing a player without compensation.