What Role Does the ‘Fixing’ Process Play in Determining the Final Settlement Price?
The 'Fixing' process refers to the specific, pre-determined methodology and time window used to calculate the final settlement price. It typically involves sampling prices from designated exchanges over a short period leading up to expiration.
This structured process ensures transparency and removes discretion, making the final settlement price predictable and auditable for all market participants.
Glossar
Final Settlement
Resolution ⎊ Final Settlement, within cryptocurrency derivatives and financial markets, signifies the conclusive determination of obligations arising from a contract, typically involving a cash or asset transfer to extinguish all outstanding commitments.
Fixing Process
Determination ⎊ This refers to the precise, pre-agreed methodology for establishing a reference price or rate at a specific point in time for contract settlement.
Pre-Determined Methodology
Calibration ⎊ A pre-determined methodology within cryptocurrency, options, and derivatives often manifests as a rigorous calibration of models to observed market data, ensuring theoretical pricing aligns with empirical realities.
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.