FREE Guide - 5 Chart Patterns You Need to Know!

Cash Settlement

What does Cash Settlement mean?

Cash settlement is the process where upon the expiry or exercise of the contract is settled by cash rather than the actual delivery of the underlying product. In futures market, when the contract is written, it is assumed that actual settlement / delivery of underlying product will be done. However, in the real world most of futures contracts are settled in cash.

Futures Knowledge Explains Cash Settlement

Cash settlement is a preferred mode since it removes the cost involved in actual delivery of goods. This process also takes care of any chances of default in the future as the buyer and seller need to put margin and also daily gains / losses are settled each day.

Get Your FREE Technical Analysis Guide!
Timing is everything, and with this guide, you'll learn how technical analysis can help find the right time to enter and exit your futures trades. Nearly 30 explanations and examples of the most popular technical analysis tools are all in this one handy guide. It's like having a futures trading mentor at your side!