Settling Price

DEFINITION of 'Settling Price'

The price used daily by clearing houses to clear all trades and settle accounts between clearing members. Also commonly referred to as "settlement price."

BREAKING DOWN 'Settling Price'

The settling price is calculated daily by the exchanges and used to identify margin deficiencies and invoice prices for deliveries.

The settling price is typically used as the closing price for futures contracts. As the closing prices of futures contracts generally fall within a range of prices, the settling price is calculated as the weighted average of transactions' prices during the closing period.

RELATED TERMS
  1. Rolling Settlement

    The process of settling security trades on successive dates so ...
  2. Cash Transaction

    A transaction that is settled with cash on the same day as the ...
  3. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  4. Window Settlement

    A form of settlement between dealers whereby trades are settled ...
  5. Settlement Date

    1. The date by which an executed security trade must be settled. ...
  6. Regular-Way Trade - RW

    A type of trade that is settled through the regular settlement ...
Related Articles
  1. Trading

    The Difference Between Forwards and Futures

    Both forward and futures contracts allow investors to buy or sell an asset at a specific time and price.
  2. Trading

    What Does a Clearing House Do?

    A clearing house is a third-party agency or separate entity that acts as a go-between for buyers and sellers in financial markets.
  3. ETFs & Mutual Funds

    What is a Settlement Date?

    A settlement date is the day a security trade must be settled.
  4. ETFs & Mutual Funds

    Explaining Delivery Versus Payment

    Delivery versus payment is a common procedure for settling the exchange of securities.
  5. Investing

    What Do Central Counterparty Clearing Houses Do?

    A central counterparty clearing house facilitates trading in European derivatives and equities markets.
  6. Trading

    An Introduction To Trading Forex Futures

    We explain what forex futures are, where they are traded, and the tools you need to successfully trade these derivatives.
  7. Markets

    A Quick Guide for Futures Quotes

    Here is a quick guide to futures quotes.
  8. Markets

    Crude Oil Prices: Comparing Future Price Vs. Current Market Price

    Discover the differences between oil futures market prices and oil spot market prices and what leads to the differences between the two.
  9. Trading

    Futures, Derivatives and Liquidity: More or Less Risky?

    Futures and derivatives get a bad rap after the 2008 financial crisis, but these instruments are meant to mitigate market risk.
  10. Investing

    What is a Forward Contract?

    A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date.
RELATED FAQS
  1. When is a share purchase marked as 'settled' by a brokerage?

    Understand the process of purchasing stock, including ordering, clearing and settlement, and learn when a stock trade is ... Read Answer >>
  2. Will a debt settlement program affect my credit score?

    Understand the impact of negotiating debt settlements on your credit score, and learn what factors determine the size of ... Read Answer >>
  3. How do mutual fund trades clear and settle?

    Learn how mutual fund trades are cleared and settled, and when the money owed must be available or the proceeds due must ... Read Answer >>
  4. Which price of a stock do I end up purchasing?

    If I purchase a stock, it gives me the executed date and the stock sale price being X. Do I get the stock at that price X ... Read Answer >>
  5. What is the difference between forward and futures contracts?

    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell ... Read Answer >>
  6. How do futures contracts roll over?

    Learn about why futures contracts are often rolled over into forward month contracts prior to expiration, and understand ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center