The Settlement Price (also called the ending price) is the 30-minute Time-Weighted Average Price (TWAP) of the underlying asset such as Bitcoin or Ethereum calculated at the time of contract settlement.
Why Is It Important?
The Settlement Price is used to determine:
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The final value of your futures or options contract
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Whether an option finishes in-the-money or worthless
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Your PnL (Profit and Loss) at expiry
Example
If you hold a BTC call option contract with a strike price of $60,000, and the settlement price is $62,000, your option is profitable by $2,000 (before fees).
This TWAP-based method ensures a fair and manipulation-resistant settlement for all traders.