What Is the Settlement Price in Futures Trading?

The settlement price is the one price each futures contract month gets per day for the purpose of squaring up money. The CFTC's glossary defines it as the daily price a clearing organisation uses to clear every trade and settle accounts between its clearing members, and the same entry names what the figure then drives: margin calls, and the invoice prices for deliveries. An exchange computes it from trading in a period it designates as the close, which is why the number in the settle column of a price table can sit away from the last trade you watched print.

What is the settlement price in futures trading?

The settlement price is a daily per-contract-month figure produced by the exchange and used by the clearing organisation to value and settle positions. The CFTC's glossary gives a clearing organisation as the entity through which futures trades are cleared and settled, which may be a division of an exchange, an affiliate, or a freestanding company; registered with the CFTC, it is a derivatives clearing organisation.

Three parts of that definition matter separately. The figure is daily, and the unit it attaches to is the contract month. It belongs to the clearing layer: it is what the clearing organisation uses between its members, and the CFTC's guide to reading futures price tables says the clearing house uses it to work out the market value of the outstanding positions those members hold. And the glossary attaches two uses to it directly, margin calls and the invoice prices that physical deliveries are billed at.

The glossary carries a third sense of the term: an exchange may establish a settlement price to even up positions that cannot be liquidated in regular trading. A neighbouring entry is worth knowing for anyone reading a second term for the same thing: clearing price carries no definition of its own, and the entry is a pointer to settlement price.

Is the settlement price the same as the closing price?

No. The closing price is what trading in the final designated period of the session produced; the settlement price is a figure the exchange computes from that material. The CFTC's glossary defines a closing price as the price, or range of prices, recorded during trading in the final period of a session officially designated the close, and defines that closing period as exchange-designated, with every transaction inside it treated as made at the close.

The two get used interchangeably anyway. The CFTC's own article on price tables says the settle is "frequently used synonymously with closing price; although they may, in fact, differ", and federal reporting rules are built around the possibility of a difference. Under 17 CFR 16.01(b)(2), in the 2025 CFR edition, a reporting market records each contract's opening and closing price, and records the price used for settlement separately where it differs from the closing price.

The last trade of the session is a third thing again. Sierra Chart's documentation, which has to account for its daily and intraday bars disagreeing, treats the official settlement and the price of the final trade as two separate figures.

How is the daily settlement price calculated?

The exchange calculates the daily settlement price from prices traded in the closing period. The CFTC's price-table guide describes the mechanism as the exchange computing a settlement price out of the range of closing prices, and gives the reason: the final few minutes of a session are often its busiest, with many trades happening at once.

Averaging is one way to do it. Paul Peterson, writing for farmdoc daily at the University of Illinois in June 2012, describes a weighted average in which each transaction's price counts for as many votes as it had contracts, and records the informal name for that, one contract one vote. His case for it is coverage: an average taking in everything that changed hands in the closing period, floor and screen together, reflects the market's overall activity better. CBOT wheat's lead month, before 25 June 2012, settled off a weighted average of electronic prices alone, with the months behind it settled off spreads.

Where nothing trades, the rules provide for that too. Under 17 CFR 16.01(b)(3), a period with no transaction, bid or offer in it leaves a reporting market two options: the session's own first or last price, clearly flagged as that, or an opening or closing price it reasonably determines to reflect market conditions, clearly marked nominal. The glossary's entry for a nominal quotation says how such a number is arrived at: commonly by averaging the bid against the asked, or by computing it from historical or theoretical relationships with contracts that trade more actively.

The formula for one contract is published with that contract: Sierra Chart's documentation sends anyone wanting the exact algorithm to the exchange's product specification.

Why does the method differ from one contract to the next?

Because the method is the exchange's own, and the markets being settled are not alike. Peterson's June 2012 survey found the procedure changing between exchanges, between commodities, and in some cases between contract months inside one commodity. Where to read the version in force is at least fixed: 17 CFR 16.01(e)(2) puts a reporting market's method for nominal and settlement prices in the rulebook published on its website.

The first thing driving the choice is how much trading there is to sample, and where. In the markets Peterson looked at in June 2012, the stretch of session feeding the calculation was as short as a final 30 seconds, in KC Wheat and CME Dairy, and as long as 120 seconds in NYMEX energy futures. Which venue's prices qualified was a separate question: until 25 June 2012, he wrote, the lead months in CBOT corn and soybeans settled from floor prices and not electronic ones, at a point when, across January to May 2012, the floor's share of CBOT corn futures volume stood at 6.48% and its share in soybeans at 5.98%, a small share of each contract's total volume.

The second is the commodity, and what the exchange accepts as evidence of its price. Grain and oilseed months inside one crop year were commonly settled off spreads in 2012, where livestock and dairy had a flat price struck for each contract month. Livestock closing ranges also took in unfilled bids above the last trade and unfilled offers below it, the better bid and the better ask, where most others worked from completed transactions alone.

Everything here is a 2012 figure, and Peterson's conclusion from the range of techniques he found was that none of them could be called the right way to settle a day.

When is a settlement price published, and who has to publish it?

Settlement prices reach the Commission early the next morning and the public by the end of the next business day, under 17 CFR 16.01. The section gives a reporting market until 7:00 a.m. on the next business day to file the settlement price and the delta factor with the CFTC, and until 12:00 p.m. for the rest of the required information. The rule's clock is US eastern standard time for markets in that zone and US central time for all others.

Publication is a separate obligation in the same section. The price information, settlement figures and no-trade fallbacks included, has to be within reach of the press and of the public at large by the end of the business day after the one it belongs to. The volume and open-contract data recorded under 16.01(a), per business day and broken out for futures by commodity and by expiration date, sits under its own paragraph, 16.01(e)(1), which adds that it has to be free of charge and in a format that lets the data be worked with. That is why daily volume and open interest are public numbers at all.

The section also handles judgement. Under 16.01(b)(4)(ii), a reporting market that uses discretion over opening or closing ranges or settlement prices has to disclose that it may do so and describe how, and has to flag each individual case where the authority is used; the rule's own parenthetical suggests an asterisk or a footnote. Under 16.01(e)(2) that explanation goes to the general public.

The text here is the 2025 edition of the section, which sits in the CFR part governing reporting by contract markets and by swap execution facilities; its source note runs from 77 FR 36696 of 19 June 2012, as amended at 77 FR 66333 of 2 November 2012.

Why does the settlement price matter to a day trader?

The settlement price sets the money. The glossary puts mark-to-market inside the cash flow machinery US futures exchanges run each day to keep margin equity for a position from falling below a minimum: at the end of every trading session the gain or loss on a contract position is worked out from how the price moved, and that amount is added to the account balance or taken off it. Variation margin is the same idea one layer up: a payment a clearing member makes to the clearing organisation, daily or intraday, when prices move against the positions it carries.

Peterson's 2012 article states the purpose in a line: to arrive at a price each account can be debited or credited against as its positions change value over the day. What an option on the contract is worth is influenced by it, and so is whether a margin call goes out. Until the figure lands, a position's profit is what the glossary calls open trade equity, the unrealised gain or loss on an open futures position.

Two further consequences reach a trader who never holds anything overnight. The glossary defines a daily price limit as the furthest a contract may travel up or down inside one session, measured off the settlement of the session before and sized by the exchange's own rules, so yesterday's settlement is the anchor for where today's price limits sit. And multi-year charts of a single market are built out of settlements: Sierra Chart's documentation for its continuous futures contract charts sets the back adjustment at each rollover as the difference between the prior day's settlement price in the newer contract and the prior day's settlement price in the one being left behind.

Why is the close on my daily chart different from the settlement price?

Because a finished daily bar and the intraday bars underneath it are carrying two different prices. A Historical Daily bar in Sierra Chart closes on the exchange's official settlement, which the platform's documentation says will usually sit away from what its intraday chart shows, and names as the main reason for a significant gap between the two at matching times.

The documentation's comparison leaves out one bar. With the market still open, it says, the final bar of a daily chart and the final intraday bar on that same symbol ought to agree, provided the intraday chart is set to show the whole 24 hours of trading.

Settlement is not the only thing separating two charts of one contract. The same page points at closing prices compared at non-corresponding times, at data that never fully arrived from the server, and at differences in how data is time-stamped, and expects daily and intraday closes not to match exactly. One setting is out of reach either way: that documentation notes session times cannot be edited on a Historical Daily chart, because the exchange or the data provider that supplied the data sets them.

That is one platform documenting its own software. The cause it points to, a daily bar closing on a computed settlement, is worth checking in whatever package you use.

What does daily settlement mean on a funded account?

Daily settlement on a simulated funded account here means the end of day balance, not an exchange settlement price. Our trading hours rule requires every position to be closed by 4:45 PM ET each trading day; anything still open then is closed automatically, and the result counts toward the balance and the drawdown. The help article states that this is how the end-of-day balance gets measured.

The rule also means nothing is carried overnight or over a weekend: every day starts flat. On shortened holiday sessions the flat time moves with the early close, to 15 minutes before it. Our help center does not use a settlement price in any account rule: the figure the rules key off is the end of day balance the flat-by time produces.

The drawdown line works on the same closing figure. It sits a fixed distance below the highest end-of-day balance, rises only when a day finishes higher than any day before it, and never comes back down; the help article is explicit that an unrealised profit spike does not move it. Intraday, the line is monitored in real time, so the figure that can end the account is the live balance during the session.

FAQ

What does "settle" mean in a futures price table?

It is the abbreviation for the settlement price, which is how most price tables label the column. The CFTC's guide to reading those tables explains that the clearing house takes the figure and works out from it what its members' open positions are worth. The guide also explains the change column as a day-on-day move in settlements, and works one backwards in its CBOT corn example: a change of -.25 on July corn means the day before settled at 258.25 cents per bushel.

What happens if a contract does not trade during the closing period?

The exchange still produces a number, and 17 CFR 16.01(b)(3) sets out two ways to get one. Where nothing traded and nothing was bid or offered, a reporting market may take the session's own first or last price, flagged clearly as that, or it may post an opening or closing price it reasonably judges to reflect market conditions, flagged clearly as nominal. A nominal quotation, in the CFTC glossary's sense, is a computed figure standing in for a period in which no trading happened.

Can you trade at the settlement price?

Where an exchange has the rule for it, yes. The CFTC glossary's entry for trading at settlement, or TAS, describes an exchange rule under which two parties trading during the day may agree to price the trade at that day's settlement, either exactly or with a stated differential added to it or taken off. What they fix when dealing is the formula; the number arrives later, once the exchange calculates the settlement.

What is the difference between the daily settlement price and the final settlement price?

A daily settlement price values open positions at the end of each session. A final settlement price ends the contract: the CFTC glossary gives it as what a cash-settled contract is settled at when it matures, under a procedure the exchange specifies. Only the second is terminal: what happens if you hold a contract to expiration depends on whether the contract calls for cash settlement or physical delivery.