Settlement means actual pay in or pay out to settle the contract. The open positions computation is used to arrive at daily mark to market margin requirement and maintaining exposure norms. The settlement could be of mark to market settlement which happens on daily basis or could be final settlement which happens at the expiry of the contract.
All futures contracts are cash settled, i.e. through exchange of cash in Indian Rupees. The settlement amount for a CM is netted across all their TMs/clients, with respect to their obligations on Mark-to-Market (MTM) settlement
Mark-to-Market settlement computational methodology for squared off position - The buy price and the sell price for contracts executed during the day and squared off.
Mark-to-Market settlement computational methodology for positions not squared off - The trade price and the days settlement price for contracts executed during the day but not squared up.
Mark-to-Market settlement computational methodology for brought forward positions - The previous days settlement price and the current days settlement price for brought forward contracts.
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