Settlement value

What does settlement value mean?

The settlement value is the amount a contract holder may receive for it when it’s held until expiration. The settlement value of a Event contracts contract is $1. The settlement value of a variable payout contract is the amount of contract value remaining, based on whether it was bought or sold. The difference between the price at which the contract was bought or sold, and the settlement value, determines the profit or loss (excluding any applicable exchange fees).

Examples of settlement value in practice

For these examples, let’s say the settlement price for all contracts expiring at the same time is 1.1009.

event contract strike: EUR/USD > 1.1000

The settlement price of 1.1009 is higher than the strike, meaning the buyer receives the payout.

Settlement value for buyer: $1

Settlement value for seller: $0

*Excluding exchange fees