Meaning of 'Cash Settlement'
A settlement strategy utilized as a part of certain future and choice contracts whereby, upon expiry or activity, the merchant of the monetary instrument does not convey the real but rather exchanges the related money position.
Separating 'Cash Settlement'
For merchants not wishing to take genuine ownership of the hidden money ware, money settlement is a more advantageous strategy for executing prospects and choices contracts. For instance, the buyer of a cotton future that is money settled, as opposed to being obliged to take responsibility for packs of cotton, pays the contrast between the spot cost of cotton and the fates cost.
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