Index Settlement For Free

Market Value, the Settlement Value is calculated for the Index using the following formula: Settlement Value = (Index Open Market Value / Index Divisor) The Index Open Market Value is calculated using the following formula: Index Open Market Value = ? Open Market Value of each component security.

Equity Index products normally close and settle 15 minutes after the daily close of trading in cash equities. The cash/futures basis may be affected to the extent that futures may fluctuate, sometimes sharply, during those final 15 minutes.

Most index options are cash settled which simply means that upon exercise cash is exchanged rather than securities. Most equity index options trade European style which means that the option can be exercised only on the date of expiration.

Upon assignment of the exercise notice, the writer of the index option has the obligation to pay a cash amount. Settlement and the resulting transfer of cash generally occur on the next business day after exercise.

Cash settled means no other requirements. Examples of cash settled index options that you can trade are S&P 500 Index (SPX), Nasdaq 100 Index (NDX), Russell 2000 Index (RUT), Volatility Index (VIX), Dow Jones Index (DJX), S&P 100 Index (OEX), and the S&P 500 Mini Index (XSP).

Index options are typically European style and settle in cash for the value of the index at expiration. Like all options, index options will give the buyer the right, but not the obligation, to either go long (for a call) or short (for a put) the value of the index at a pre-specified strike price.

Futures contracts have expiration dates as opposed to stocks that trade in perpetuity. They are rolled over to a different month to avoid the costs and obligations associated with settlement of the contracts. Futures contracts are most often settled by physical settlement or cash settlement.

When trading Equity Index futures, there are two types of settlement: daily and final. Daily settlement refers to the contract's settlement price on a daily basis while final settlement represents the final value of the contract at expiration.

The settlement amount is calculated by adding back the accrued interest on the clean price and then multiplying by the face value. The settlement amount is rounded off to the nearest krona. Settlement occurs two business days after the trade date.

Index futures contracts are settled in cash and the closing index value on the date of the expiry of the contract is considered as the settlement price for index futures.So, if on July 27, the Nifty stands at 3550, you will have made a loss of Rs 1,000 (i.e., difference in index levels 10 contract size 100).