Cash Settlement

Definition:

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.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Forward forward contract

In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to at a fixed price for future delivery.

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