Settlement Price
The settlement price is the official price used to determine the payoff and daily mark-to-market payments for a derivatives contract at close of trading or at expiration. It is set by the exchange using a specified price discovery process.
Example: On a given day, the near-month crude oil futures settlement price is published after the close at 70.50 per barrel; the change from the prior settlement price is used to calculate daily margin implications for traders holding the contract.
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