Settlement Process for Derivatives

Settlement Process for Derivatives

Our robust and secure settlement process guarantees all transactions and daily settlements for all derivative contracts.

Settlement for Derivatives Contracts

  1. Settlement for Variation Margins:
    • Variation Margins (Mark to Market Profits/Losses) are calculated at the end-of-day using trade prices / daily settlement prices, and they are settled against the cash balance.
  2. Variation Margins Offset against Cash Balance:
    • The aggregated and net gain from the mark-to-market will be credited to the cash collateral balance, while the aggregated and net loss from the mark-to-market (Variation Margin) shall be deducted against the cash balance. Any shortfall shall be settled via direct debit.
  3. Settlement at Expiry:
    • AD Clear also settles and closes all remaining open positions at the end of the expiration date for all expiring derivatives contracts.