# Are Index Futures Ever Physically-Settled? ⎊ Path

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

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## Are Index Futures Ever Physically-Settled?

No, index futures are virtually always cash-settled. An index, such as the S&P 500 or a Cryptocurrency Index, is a theoretical basket of assets, not a single physical asset that can be delivered.

Settlement is achieved by calculating the cash difference between the contract price and the final index value. Physical delivery of all underlying components of an index would be logistically impossible and financially inefficient.

- [What Is the Concept of a “Basket” of Stablecoins in a Multi-Asset Stableswap Pool?](https://learn.greeks.live/path/what-is-the-concept-of-a-basket-of-stablecoins-in-a-multi-asset-stableswap-pool/)

- [Why Are Most Cryptocurrency Index Options Cash-Settled?](https://learn.greeks.live/path/why-are-most-cryptocurrency-index-options-cash-settled/)

- [How Does the Convergence Process Differ between Physically-Delivered and Cash-Settled Futures?](https://learn.greeks.live/path/how-does-the-convergence-process-differ-between-physically-delivered-and-cash-settled-futures/)

- [How Does the Choice of Collateral (E.g. ETH Vs. a Basket of Tokens) Affect the Over-Collateralization Ratio?](https://learn.greeks.live/path/how-does-the-choice-of-collateral-e-g-eth-vs-a-basket-of-tokens-affect-the-over-collateralization-ratio/)

- [What Are the Key Differences in Settlement Price Calculation between Physically-Settled and Cash-Settled Futures?](https://learn.greeks.live/path/what-are-the-key-differences-in-settlement-price-calculation-between-physically-settled-and-cash-settled-futures/)

- [What Is the Risk Management Implication of Using a Basket of Stablecoins versus a Single One for Collateral?](https://learn.greeks.live/path/what-is-the-risk-management-implication-of-using-a-basket-of-stablecoins-versus-a-single-one-for-collateral/)

- [What Is the Role of the “Delivery Month” in a Physically Settled Futures Contract?](https://learn.greeks.live/path/what-is-the-role-of-the-delivery-month-in-a-physically-settled-futures-contract/)

- [What Is the Settlement Method for Options on the S&P 500 Index?](https://learn.greeks.live/path/what-is-the-settlement-method-for-options-on-the-sp-500-index/)

## Glossar

### [Futures Contract](https://learn.greeks.live/area/futures-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Leverage ⎊ Futures contracts in cryptocurrency represent agreements to buy or sell an underlying asset at a predetermined price on a future date, functioning as a derivative instrument that allows for amplified exposure without immediate asset ownership.

### [Index Futures](https://learn.greeks.live/area/index-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Derivation ⎊ Index futures, within cryptocurrency markets, represent agreements to buy or sell an underlying crypto index at a predetermined price on a future date, functioning as forward contracts standardized for exchange trading.

## Discover More

### [How Does a Clearing House Manage Default Risk in the Context of Physically-Settled Crypto Futures?](https://learn.greeks.live/path/how-does-a-clearing-house-manage-default-risk-in-the-context-of-physically-settled-crypto-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Clearing House Manage Default Risk in the Context of Physically-Settled Crypto Futures?](https://learn.greeks.live/wp-content/uploads/2025/10/Biomimetic-Ocular-Sensor-Array-Resting-Upon-Smooth-Carbon-Fiber-Structured-Asset-Cover.webp)

Through margin requirements, real-time monitoring, and a default waterfall to source the asset if a party fails to deliver.

### [How Does the Settlement Process Differ between Cash-Settled and Physically-Settled Futures?](https://learn.greeks.live/path/how-does-the-settlement-process-differ-between-cash-settled-and-physically-settled-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Settlement Process Differ between Cash-Settled and Physically-Settled Futures?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Representation-of-Multi-Asset-Digital-Collateralization-Frameworks-and-Strike-Price-Mechanisms.webp)

Physically-settled futures involve asset delivery, while cash-settled futures involve a cash transfer based on price difference at expiration.

### [What Is the Difference between Physically-Settled and Cash-Settled Crypto Futures?](https://learn.greeks.live/path/what-is-the-difference-between-physically-settled-and-cash-settled-crypto-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between Physically-Settled and Cash-Settled Crypto Futures?](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetry-in-Blockchain-Asset-Hedging-Symmetric-Pairwise-Futures-Contract-Execution-Visualized.webp)

Physically-settled delivers the crypto asset; cash-settled pays the profit/loss difference in fiat or stablecoin.

### [What Are the Accounting Implications of Holding Physically-Settled Futures versus Cash-Settled Ones?](https://learn.greeks.live/path/what-are-the-accounting-implications-of-holding-physically-settled-futures-versus-cash-settled-ones/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Accounting Implications of Holding Physically-Settled Futures versus Cash-Settled Ones?](https://learn.greeks.live/wp-content/uploads/2025/10/Illuminated-Digital-Asset-Swap-Mechanism-Intersecting-Planetary-Simulation-Volatility-Surface-Modeling.webp)

Physical may result in balance sheet asset recognition; cash-settled is typically marked-to-market as a derivative instrument.

### [What Is the Role of a Custodian in Physically-Settled Crypto Futures?](https://learn.greeks.live/path/what-is-the-role-of-a-custodian-in-physically-settled-crypto-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Role of a Custodian in Physically-Settled Crypto Futures?](https://learn.greeks.live/wp-content/uploads/2025/10/Teal-Encapsulation-of-Digital-Asset-Securitization-Mechanism-and-Option-Hedging-Exposure.webp)

A custodian securely holds the underlying crypto asset and facilitates its physical transfer upon the futures contract's expiration.

### [Why Is the Risk of "Forks" a Consideration in Physically-Settled Crypto Futures?](https://learn.greeks.live/path/why-is-the-risk-of-forks-a-consideration-in-physically-settled-crypto-futures/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Is the Risk of "Forks" a Consideration in Physically-Settled Crypto Futures?](https://learn.greeks.live/wp-content/uploads/2025/10/Aerodynamic-Cryptocurrency-Derivatives-Interface-Analyzing-High-Frequency-Trading-Execution-Vectors.webp)

Forks create uncertainty over which version of the asset is the deliverable one, complicating physical settlement logistics.

### [Define the Term 'Delivery Date' in a Physically-Settled Futures Contract](https://learn.greeks.live/path/define-the-term-delivery-date-in-a-physically-settled-futures-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Define the Term 'Delivery Date' in a Physically-Settled Futures Contract](https://learn.greeks.live/wp-content/uploads/2025/10/Conceptual-Modeling-of-High-Frequency-Algorithmic-Trading-Microstructures-Within-Digital-Asset-Derivatives-Exchange.webp)

The delivery date is the specified date when the buyer and seller of a futures contract must exchange the physical asset.

### [Why Do Cash-Settled Futures Sometimes Require Less Initial Margin than Physically-Settled Ones?](https://learn.greeks.live/path/why-do-cash-settled-futures-sometimes-require-less-initial-margin-than-physically-settled-ones/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Do Cash-Settled Futures Sometimes Require Less Initial Margin than Physically-Settled Ones?](https://learn.greeks.live/wp-content/uploads/2025/10/Dark-Metallic-Substrate-Mechanism-Illustrating-On-Chain-Settlement-Infrastructure-Precision.webp)

Cash-settled products lack the operational and delivery risk component, which can lead to lower initial margin requirements.

### [What Is the Difference between a Physically Settled and a Cash-Settled Derivative?](https://learn.greeks.live/path/what-is-the-difference-between-a-physically-settled-and-a-cash-settled-derivative/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Difference between a Physically Settled and a Cash-Settled Derivative?](https://learn.greeks.live/wp-content/uploads/2025/10/Analyzing-Solid-State-Module-Integrity-for-Decentralized-Finance-Infrastructure-Security-Protocols.webp)

Physical settlement involves asset delivery; cash settlement involves only the exchange of profit/loss in currency.

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