cash settlement

Cash Settlement

The process by which the terms of an option contract are fulfilled through the payment or receipt in dollars of the amount by which the option is in-the-money as opposed to delivering or receiving the underlying stock.

Cash Settlement Contracts

Futures or option contracts in which the counterparties agree that instead of delivering the underlying assets at the execution of the contract, one delivers their cash equivalent. For example, suppose someone bought a call contract taking on the obligation to buy a certain number of barrels of oil, should the option be exercised. If/when the option is exercised, the call holder pays the strike price. In exchange, the counterparty delivers the cash value of the agreed upon number of barrels of oil. Such a transaction is usually netted between the parties so that cash only changes hands once.

cash settlement

Settlement of a futures contract in cash rather than in the asset underlying the contract. For example, stock index futures call for cash settlement because it is not feasible actually to deliver an index or the securities constituting an index.

Cash settlement.

To settle a futures contract where the underlying asset is a financial instrument, such as a stock index or interest rate rather than a physical commodity, you deliver cash.

In contrast, when you settle a futures contract on other commodities, you deliver the physical product. But because index values or interest rates are intangible, physical delivery is not possible.

The way you calculate the amount due is defined in the contract. When the underlying instrument is an index, this usually involves multiplying the value of the index times a fixed amount. For example, the cash settlement of a contract on the Standard & Poor's MidCap 400 Index is determined by multiplying the value of the index times $500.

However, in the vast majority of cases, futures contracts are offset before the settlement date, and no delivery is required.

cash settlement

purchases of FINANCIAL SECURITIES which have to be paid for immediately rather than being settled after the end of the stock exchange ACCOUNT PERIOD.
References in periodicals archive ?
PBG has withdrawn with prejudice both Notices on an irrevocable basis, with the right to reissue the Notices if Gowest does not satisfy its obligation to pay the Cash Settlement Amount (as defined below); Gowest is obligated to pay to PGB an aggregate of US$9 million in cash as follows (i) US$1,500,000, as a non-refundable deposit, on or prior to 4:30 p.m.
The ISP claims of KE must be treated separately through cash settlement.
Some of the world's biggest banks are believed to be investing as much as USD50m to build a blockchain-based digital cash settlement system.
Request for quotations : automation of cash settlement in production canteens
The council might just as well have handed over the cash settlement at the very hint of industrial action instead of pussyfooting around a dispute that it neither had the desire nor resolve to see through.
She said the commission has put in place a number of initiatives to protect investors as well as boost their confidence including the e-dividend mandate management system, direct cash settlement, setting up a committee on identity management in the capital market, regularization of multiple subscription, complaints management framework among others.
Through a guided building reinstatement scoping tool, Ageas Household Claims staff are able to calculate the cost of a repair, based on a National Repair Schedule and reflecting regional variation to provide a consistent method of cash settlement of claims for customers.
The company may, subject to certain conditions, elect cash settlement or net share settlement for all or a portion of its rights or obligations under the forward sale agreements.
Now, UBS Group AG holds 41,193,920 shares of a nominal value of DKK1 (aggregate nominal value DKK 41,193,920) in TDC, corresponding to 5.07% of the total share capital and of the total voting rights, as well as 51,229,322 shares and voting rights in TDC through financial instruments (with a right to cash settlement), corresponding to 6.31% of the total share capital and of the total voting rights.
Hoag, recently started offering Personalized Cash Settlement Blueprint Sessions for community residents.
The cash settlement is not disclosed in court documents which dismiss the fraud complaint.
Both parties have agreed that funding of the acquisition deal will come through cash settlement and issuance of new shares of Dallah Health with the remaining amount to the sellers through capital increase.