How Does the Settlement Process Differ between Physically-Settled and Cash-Settled Derivatives? ⎊ Path

How Does the Settlement Process Differ between Physically-Settled and Cash-Settled Derivatives?

Physically-settled derivatives require the actual delivery of the underlying asset upon expiration. For example, a physically-settled Bitcoin future requires the delivery of Bitcoin.

Cash-settled derivatives, however, are settled by paying the difference between the contract price and the market price in cash (or stablecoins), with no physical asset exchange.

How Does a Cash-Settled Futures Contract Differ from a Physically-Settled One in This Context?

What Are the Key Differences in Settlement Price Calculation between Physically-Settled and Cash-Settled Futures?

How Does the Concept of “Delivery” Differ between Physically-Settled and Cash-Settled Futures?

How Does ‘Physical Settlement’ of a Futures Contract Differ from ‘Cash Settlement’?

What Is the Difference between Physical and Cash Settlement in Standardized Futures?

How Do Bakkt’s Physically-Settled Bitcoin Futures Differ from Cash-Settled Futures?

How Does the Settlement Process Differ between Cash-Settled and Physically-Settled Futures?

What Is the Primary Difference between Cash-Settled and Physically-Settled Futures Contracts?

Glossar

Final Settlement Price

Valuation ⎊ The Final Settlement Price in cryptocurrency derivatives represents the agreed-upon value of the underlying asset at contract expiration, crucial for determining payouts in options and futures.