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Finance Dictionary and Glossary of Investment Terms
Cash Settlement
Definition 1.
A term referring to the method used in settling certain future and option contracts whereby, upon expiry or exercise, the seller of the financial instrument transfers the associated cash position rather than delivering the actual.
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Definition 2.
A transaction settled with a cash payment in the amount of profit or loss rather than the physical delivery of a commodity or other underlier. Examples include futures and options contracts for indices, which cannot be delivered.
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