Are Futures Contracts Physically Settled? Understanding the Mechanics and Implications
Futures contracts are widely used financial instruments that allow market participants to hedge against price fluctuations or speculate on future market movements. One crucial aspect of futures contracts is the settlement method, which can be either physically settled or cash settled. In this article, we will delve into the concept of physical settlement in futures contracts, exploring its mechanics, implications, and relevance in today’s financial landscape.