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

Physically-settled requires delivery of the asset; cash-settled pays the price difference in fiat currency.
Greeks.Live24.11.25

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

Physically-settled futures involve the actual delivery of the underlying asset, like Bitcoin, at the contract's expiration. Cash-settled futures, conversely, are settled by paying the difference between the contract price and the market price in cash.

This means no actual Bitcoin changes hands for cash-settled contracts. The choice impacts market mechanics and the need for physical custody.

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