What Is the Settlement Method for Options on the S&P 500 Index? ⎊ Path

What Is the Settlement Method for Options on the S&P 500 Index?

Options on the S&P 500 index (SPX) are exclusively cash-settled. Since the index is a non-deliverable theoretical basket of stocks, physical delivery is impossible.

The settlement is based on the difference between the final settlement value of the index and the option's strike price.

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Glossar

Final Settlement Value

Settlement ⎊ Within cryptocurrency derivatives and options trading, the Final Settlement Value represents the conclusive monetary outcome determined after all contractual obligations are fulfilled, reflecting the net position of a participant.

Settlement Method

Definition ⎊ Settlement method refers to the procedure for fulfilling the obligations of an options contract at maturity or upon exercise.