Settlement Price

In futures trading, the settlement price is an official price established at the end of each trading day that uses the range of closing prices for a particular contract.

It is computed based on:

  • the closing offer and bid price
  • last actual traded price
  • and weighted average of prices traded during the closing minutes of the trading day

This price is used to settle accounts with open positions and determine margin requirements as well as the following day’s price limits.

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