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Answer: b) The price at or near the end (closing) of the day
The **settlement price** is typically the price at or near the **end of the trading day**, i.e., the closing price used by the exchange for marking positions to market. **Why B is correct:** - Futures positions are usually marked to market using the daily settlement price. - This price is generally based on end-of-day trading activity. **Why the other options are wrong:** - **A**: That describes an opening price, not settlement price. - **C** and **D**: Settlement price is not typically a simple average.
Author: Manit Arora
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Q-150.3. The settlement price is typically:
A
a) The price at or near the beginning (open) of the day
B
b) The price at or near the end (closing) of the day
C
c) The arithmetic average of the trading day
D
d) The geometric average of the trading day
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