Cash Settlement
How can help cash settlement?
Cash settlements occur as part of payments associating to futures contracts and also as part of the settlement procedure in a legal dispute. This allows the underlier of the security demanded with the transaction to retain the underlying asset that formed the basis for the futures or options in the first place. Often, this is sufficient to at least cover the actual expenses of the vendor, although it eliminates any profit on the invoiced transactions. Some vendors will also offer a client a cash settlement in order to discharge an outstanding debt.
This is often the case when the customer is facing severe financial problems and may be considering bankruptcy. Cash Settlement is a method of settling forward contracts or futures contracts by cash rather than by physical delivery of the underlying asset. The cash position is the difference between the spot price of the asset on the settlement date and the agreed upon price as dictated by the forward/future contract.
Looking for anything Else ? Try Our Search
July 26th, 2010 at 5:56 pm
IT WOULD BE VERY HELPFUL FOR ME IF YOU PL. FURNISH ME MODEL QUESTION PAPERS FOR MSW ENTRANCE EXAM