Definition

Settlement Price Determination

Meaning ⎊ The calculation method used to define the official daily closing price of a derivative to ensure fair valuation.
Greeks.liveApril 2, 2026

Settlement Price Determination

Settlement Price Determination is the process by which an exchange calculates the official closing price for a derivative contract at the end of a trading day. This price is used for daily mark-to-market adjustments and for final settlement upon contract expiration.

Exchanges typically use a volume-weighted average price or a median price from multiple liquid sources to prevent manipulation. By using a robust methodology, the exchange ensures that the settlement price is fair and representative of the true market value.

This prevents traders from attempting to manipulate the price at the very end of the session. Accuracy here is essential for maintaining trust and market integrity.

Execution Path Optimization
Loss Recognition Timing
Merchant Settlement Risk
Oracle Price Feed Reliability
Expiration Volatility
Margin Buffer Allocation
Derivative Settlement Cycles
Final Reference Price

Glossary

Settlement Value

Calculation ⎊ Settlement Value, within cryptocurrency derivatives, represents the cash or asset amount exchanged at contract expiration or termination, determined by the underlying asset’s price and contract specifications.

Spot Price

Asset ⎊ The spot price in cryptocurrency represents the current market price at which an asset is bought or sold for immediate delivery, functioning as a fundamental benchmark for derivative valuation.