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Does the Settlement Type Influence the Option Premium?

Yes, as physical settlement can embed value related to asset delivery, slightly affecting the premium.
Greeks.Live24.11.25

Does the Settlement Type Influence the Option Premium?

Yes, the settlement type can influence the option premium. A physically settled option might have a slightly higher premium due to the embedded optionality of receiving the physical asset, which can be valuable during delivery squeezes.

However, the impact is generally less significant than factors like volatility and time to expiration.

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