If an Option Writer (seller) has their option assigned, this means they need to make good on their obligations to the Option Buyer. Settlement refers to the method by which those are realised. There are generally two approaches: Cash Settlement or Physical Settlement.
The methods by which settlement is calculated vary across different exchanges and Options investors need to be aware of the specific details of any contracts they trade.
Contributed by: Ralph Windsor
The methods by which settlement is calculated vary across different exchanges and Options investors need to be aware of the specific details of any contracts they trade.
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.