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Cash settlement in options trading

Assignment and Cash Settlement in Options Trading
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Cash settlement in options trading

This lesson assumes that you understand your financial goals and are familiar with all the risks and opportunities online trading provides. You can schedule a free call with our expert trader that will help you find the best way to achieve your financial goals.

Delivery of the underlying asset can not always be made. In such cases, a method of cash compensation can be used, also called a ‘cash settlement’. It is obvious that these options cannot belong to the American option type. Cash-settled options are always in European style.

Cash settlement

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Assignment and Cash Settlement in Options Trading

Tradimo helps people to actively take control of their financial future by teaching them how to trade, invest and manage their personal finance.

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Risk warning: Trading in financial instruments carries a high level of risk to your capital with the possibility of losing more than your initial investment. Trading in financial instruments may not be suitable for all investors, and is only intended for people over 18. Please ensure that you are fully aware of the risks involved and, if necessary, seek independent financial advice. The educational content on Tradimo is presented for educational purposes only and does not constitute financial advice.

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