Commodity CFDs give clients exposure to the underlying commodity without the confusion
of physical settlement.
When you hold to maturity a long future contract position
with physical settlement, you pay the final settlement price as calculated by the exchange for the underlying you receive and not your initial purchase price.
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Physical settlement avoids those issues because you are not beholden to some abstract price that might or might not be manipulated.
Currentlysilver trades in China's
physical settlement market (Shanghai Futures Exchange) at a significant premium to the price on the COMEX paper market.
In fact, decentralized crypto and physical - settlement Bitcoin markets will be more robust, Matonis explained to Bitcoin Magazine, since warehousing, open - contract limits and maintenance - margin calculations all behave differently under a digital assets class
with physical settlement.
He said, «
Physical settlement avoids those issues because you are not beholden to some abstract price that might or might not be manipulated.
Assimilating your neighbors is a faster expansion strategy than
physical settlement, which inevitably progresses slower than the speed of light.
The results of the squaring off of the transaction are directly debited from or credited to the parties» margin accounts and
no physical settlement is required.
There is
no physical settlement in currency trading.
He said market participants want futures contracts to switch from cash to
physical settlement.
Numerous market participants are calling on existing cryptocurrency exchanges that provide futures contracts to switch from cash to
physical settlement.