settlement price

Settlement Price

The average price at which a contract trades, calculated at both the open and close of each trading day.

Notes:

Settlement prices are necessary for determining whether gains or losses were made on a contract held during a certain time period. Settlement prices are also required to determine if an investor's margin account requires a margin call for any day a particular security is held.

See also: Contract for Differences, Futures Contract, Margin, Margin Call, Settlement Date

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Settlement price

A figure determined by the closing range that is used to calculate gains and losses in futures market accounts. Settlement prices are used to determine gains, losses, margin calls, and invoice prices for deliveries. Related: Closing range.

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settlement price

In futures trading, an official price established at the end of each trading day by using the range of closing prices for a particular contract. This price, similar to the closing price for stock, is used to determine margin requirements and the following day's price limits.