Settlement
- 9월 18, 2017
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Settlement
To conclude and organize the contract by exchanging money or materials after the contracting party ends the transaction
In Forward Contracts, you go to the maturity date to terminate the contract and settle the profit and loss exchange, and in the futures of the exchange, daily settlement (Marking to Market) is done.
Daily settlement refers to the calculation of profit and loss at a fixed time once a day. If the price fluctuation increases before the expiration date, there is a greater risk that the contract will not be fulfilled on the due date.
To reduce these risks, the Exchange calculates the closing price of the futures according to the closing price calculation method set by the Exchange, calculates the profit and loss between the trading parties based on the closing price of the futures, and reflects them in the accounts. These prices are called settlement prices or settlement prices, and such operations are called settlement.
Generally, settlement refers to closing the contract after the settlement, which is the termination of the contract. However, the term "settlement" in the futures trading refers to the calculation of the profit and loss until the settlement date, without terminating the contract between the parties.
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