What is the price of settlement?
On the stock market, the price of settlement is the price for which the futures trading trades. Settlement prices are calculated at the beginning and at the end of each trading day. The price of the settlement is used to calculate how much it has obtained or has lost a contract that day and to determine whether a margin's account requires a margin call. The price of the settlement counts on the settlement date, which is usually three days after the date of trade.
Futures is a contract that requires a given security such as stock, bond, currency or commodity, be delivered at the date at a given price. Unlike the possibility, the future is the obligation to buy or sell. The investor must create or purchase basic security at the prescribed date at that price. Futures contracts are derivatives because they are based on basic safety. Futures contracts are of speculative nature.
futures are usually purchased on the edge and the margin's account must be settled daily. When an investor lends money from brokers to buy securities, he uses an accounton the edge. The loan collateral consists of cash and securities held on the investor's account. If the cash balance on the margin account drops below a certain level, the margin call is issued. The margin call requires that the investor of the disposal of the securities disposal or put more cash to the account to get cash to a level that is in accordance with the Regulation. The settlement price determines whether the margin calls necessary on the given day.
profits and losses due to the price of the settlement day is usually paid in cash rather than in the exchange of securities. Such a cash payment is called the difference contract. A couple or the purchase and sale of securities compensation often requires a contract to difference in the settlement of transactions. Cash transactions equal to the tray share in shopping and sales prices are used to settle compensatory transactions.
Because the date of settlement of trade is usually three working days after the date of trade, some investors use the settlement or rolling strategythe statement of the statement. The investor will trade securities in the coming days, because the trade that is created today will settle the day before trading tomorrow. Like futures, pairs and margins are also a sophisticated strategy that the investor should fully understand before his business.