Business and Personal Finance Dictionary

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• SETTLEMENT OR SETTLING PRICE
  
  The price established by the Exchange settlement committee at the close of each trading session as the official price to be used by the clearinghouse in determining net gains or losses, margin requirements, and the next day’s price limits. The term “settlement price” is often used as an approximate equivalent to the term “closing price.” The close in futures trading refers to a brief period at the end of the day, during which transactions frequently take place quickly and at a range of prices immediately before the bell. Therefore, there frequently is no single closing price, but a range of prices. In months with significant activity, the settlement price is derived by calculating the weighted average of the prices at which trades were conducted during that period.
  
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