Been reading about different settlement options and keep seeing cash payment mentioned everywhere.
But I noticed some platforms use different terms for the same thing. What other names do they call this type of settlement?
Want to make sure I understand all the terminology properly.
Some brokers refer to it as “financial settlement” or simply “cash settlement” instead of requiring physical delivery.
When I began trading, I was nervous about buying oil contracts thinking I might end up with barrels at home.
I learned quickly that it’s all about cash, just the profit or loss in your account.
Platforms usually call it ‘cash settled’ or ‘net settlement’ - sometimes ‘financial settlement.’ The key thing is you’re only dealing with cash differences, not getting the actual underlying assets. In my experience, these terms mean the same thing: cash shows up in your account instead of physical delivery.
Platforms often use ‘cash settled’ or ‘net settlement’ for this option.
Other terms include cash settled, net settlement, and financial settlement. They indicate cash differences without physical delivery of assets.
Commonly, platforms will refer to it as “cash settled” or “net settlement”. This just means you are dealing with the difference in money.
Physical delivery is not usual for retail traders, which means you won’t actually receive the asset. Another term is “financial settlement”, but they all refer to the same concept.