How Does 'Delivery' Work in a Cash-Settled Futures Contract? ⎊ Path

How Does ‘Delivery’ Work in a Cash-Settled Futures Contract?

In a cash-settled futures contract, there is no physical exchange of the underlying asset. Instead, on the expiration date, the difference between the contract price and the current spot price is settled in cash.

This is common for financial indices or cryptocurrencies where physical delivery is impractical or undesirable.

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Glossar

No Physical Exchange

Settlement ⎊ No physical exchange refers to the cash settlement method used for derivatives contracts, where the underlying asset is not physically delivered upon expiration.