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Why Is Price Manipulation a Concern for the Final Settlement Price Calculation?

Manipulation at settlement can create illicit gains; averaging prices across multiple venues prevents this.
Greeks.Live22.11.25

Why Is Price Manipulation a Concern for the Final Settlement Price Calculation?

Price manipulation is a concern because a small group of traders could attempt to artificially inflate or depress the spot price at the exact moment of settlement. Since the final settlement price determines the profit or loss on the entire futures contract, manipulating this price could yield substantial, illicit gains.

Exchanges use averaged index prices from multiple sources to make this manipulation attempt prohibitively expensive and difficult.

How Does an Attacker Cash out Their Illicit Gains?
How Is a ‘Settlement Price’ Determined by a DON for a Futures Contract?
Why Is It Necessary to Use a Multi-Exchange Average (Index Price) Instead of a Single Exchange’s Spot Price?
How Do Time-Weighted Average Prices (TWAPs) Mitigate Oracle Manipulation Risks?

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