What is Settlement Price?

Glossaryfutures-handel

Settlement Price

The settlement price is the official closing price of a futures contract, determined daily by the exchange and used as the basis for mark-to-market valuation.

By Marco Bösing1 min read

What Is the Settlement Price?

The settlement price is the official closing price of a futures contract, calculated daily by the exchange. It serves as the basis for mark-to-market valuation — the daily profit and loss calculation for all open positions.

The calculation is based on trading activity in the final 30 seconds before market close. A volume-weighted average price (VWAP) is computed from these trades and used as the settlement price.

Why Is the Settlement Price Important?

Margin calculation — Daily margin requirements are based on the settlement price
Profit and loss settlement — Open positions are valued daily at the settlement price
Contract valuation — Serves as the reference price for options on futures and spread calculations
Transparency — Provides a unified reference price for all market participants

For a deeper analysis and practical application, see our article on the settlement price in trading.

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