- cash settlement
- Instead of having the actuals delivered, cash is transferred upon settlement. The CENTER ONLINE Futures Glossary————The agreement of a buyer and seller to exchange the security and the payment on the same day as the trade. For money market instruments, cash settlement is the delivery of purchased securities against payment in fed funds on the same day that the trade is made.See settlement. American Banker Glossary————The process by which the terms of an option contract are fulfilled through the payment or receipt in dollars of the amount by which the option is in-the-money as opposed to delivering or receiving the underlying stock. Bloomberg Financial Dictionary————Final disposition of open positions on the last trading day of a contract month. Occurs in markets where there is no actual delivery. Chicago Mercantile Exchange Glossary————In respect of derivatives, the settlement of futures and options contracts for cash instead of settlement involving the physical transfer of goods. Typically used for index-based products such as the FTSE 100 future and option. In respect of securities, the settlement one business day after the day of trade. Dresdner Kleinwort Wasserstein financial glossary————Final disposition of open positions on the last trading day of a contract month. Occurs in markets where there is no actual delivery. Exchange Handbook Glossary————1. The cash payment made by the issuer to a warrant holder following the exercise of a warrant. The settlement amount is equal to the intrinsic value, calculated in the manner described in the Pricing Supplement.2. The process by which the terms of a warrant contract are fulfilled through the payment or receipt in euros of the warrant's intrinsic value. The other possible settlement process is physical settlement. NYSE Euronext Glossary
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Cash settlement is the most common method of settling financial futures. It involves closing out the position as opposed to physically delivering the underlying financial instrument or commodity. Also used to describe a transaction that settles the same day as the trade day.► See also Futures, Closing a Position.* * *
cash settlement UK US noun [C] (also cash deal)► FINANCE, STOCK MARKET an agreement to buy shares with money, not with other investments: »The cash settlement is the largest ever in the municipal bond market.
Financial and business terms. 2012.
