Stock index futures contracts are terminated by delivery the portfolio of stocks represented by the index.

Question

Quizplus · Accepted Answer

Stock index futures contracts are usually cash-settled, meaning no physical delivery of the underlying securities is made. Instead, the parties involved settle the difference in value between the initial price and the price at contract expiration. However, some exchanges do allow for physical delivery of the underlying securities, but this is not the standard method of termination.

Stock Index Futures Contracts Are Terminated by Delivery the Portfolio