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Define “Settlement Risk” in the Context of Options Trading

The risk that one party fails to deliver the cash or underlying asset after the trade is executed, which is mitigated by atomic blockchain settlement.
Greeks.Live07.11.25

Define “Settlement Risk” in the Context of Options Trading.

Settlement risk is the risk that one party to a trade fails to deliver the cash or the underlying asset as agreed upon after the trade has been executed. In options trading, this could be the risk that the writer fails to deliver the underlying asset upon exercise or the buyer fails to deliver the premium.

Blockchain finality mitigates this risk by ensuring atomic, simultaneous exchange.

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