Physical Settlement means the Underlying asset or commodity must either be delivered by the option seller (in the case of calls). For puts, the option seller must agree to purchase from the Option Buyer the Underlying asset or commodity at the Strike Price of the option. Physical Settlement is more conventional for stocks and commodities.
Contributed by: Ralph Windsor
Related Directory Entries
External Links
Feeling Unsettled by Settlement Valueshttp://www.optioninvestor.com/page/oin/education/opt101/2009/05-30.html
Article describing how stock and index option settlement prices are derived.
Comments
There are currently no comments for this term.
Post a Comment
You must be registered and logged in to post a comment.