What Is 'Cash Settlement' versus 'Physical Settlement' for Crypto Options? ▴ Learn

What Is ‘Cash Settlement’ versus ‘Physical Settlement’ for Crypto Options?

Cash settlement means that upon exercise or expiration, the difference between the strike price and the underlying asset's settlement price is paid in fiat or a stablecoin. Physical settlement means the actual underlying cryptocurrency is delivered from the seller to the buyer.

Most major crypto options are cash-settled.

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