Identifier: C3T1L4 · Revision: 2026-10-26 · Classification: domestic

Decision and objectives

Reconcile daily settlement with cumulative trading profit. The decision record must connect the exposure, cash dates and implementable contract, rather than stop at a favorable price forecast.

By the end, you can reconcile daily settlement with cumulative trading profit; distinguish a final cash difference from physical principal delivery; plan cash availability around settlement dates.

Prerequisite: C3T1L3; completed Classes 1 and 2 and the Stock Market School foundation or Forex School foundation. All cases below are hypothetical; their prices, costs, rates, dates, contractual assumptions and collateral amounts are teaching inputs, not current offers.

Mechanics

Daily settlement transfers futures gains and losses through the margin account. Final settlement closes the remaining valuation difference at the specified reference. A cash-settled index contract ends with money movements, not delivery of index shares. Physical settlement adds a security or currency principal exchange; earlier variation settlements do not remove that obligation. An expiry long may need the full delivery payment while the short must supply deliverable assets.

Price and return drivers

For a fixed long position, daily cash = contracts × multiplier × (today settlement − previous settlement). The sum telescopes to final minus entry, but timing matters. A gain recorded today may not be withdrawable by your bank payment deadline. Distinguish trade date, valuation date, cash availability and asset delivery in the ledger.

Worked case

One hypothetical cash-settled index future, multiplier TRY 10, enters at 10,000. Day-one settlement 9,900 debits TRY 1,000; day two 10,050 credits TRY 1,500; final 10,100 credits TRY 500. Cumulative gross is −1,000 + 1,500 + 500 = TRY 1,000. A TRY 12,000 starting cash collateral balance becomes TRY 11,000, TRY 12,500 and TRY 13,000 before charges. Total commission TRY 30 and collateral opportunity cost TRY 60 leave TRY 910 economic profit before tax. Releasing TRY 12,000 original collateral is not another TRY 12,000 profit.

Adverse case

A separate hypothetical single-stock long represents 100 shares and has final delivery price TRY 120 per share: principal payment is TRY 12,000, even if earlier variation gains were only TRY 300. With only TRY 3,000 liquid cash available, the delivery funding shortfall is TRY 9,000. The retrieved stock specification describes physical delivery and T+2 expiry settlement; a real ticket must be checked for adjustments and the applicable calendar. Before expiry, prices can diverge from the final reference.

Practical use

Obtain the member's settlement and withdrawal schedule in writing. Use bank business days and currency holidays, not calendar-day assumptions. Physically delivered shares must be eligible and available in the correct account; an intention to buy them later is not inventory. Budget commissions, delivery charges, funding and tax separately from variation transfers.

Reconcile the confirmation, position register and cash statement separately. Costs include the quoted bid/ask spread, brokerage and clearing charges, collateral or principal financing, currency conversion, custody where relevant, and exit or termination charges. A mark is not a fill. Any amount explicitly excluded below remains outside the reported result. Tax is excluded from these teaching cases: an actual comparison requires income year, investor residence and individual/corporate status, contract and acquisition dates, settlement form and effective law. The GIB guide, checked 2026-10-26, covers 2025 individual investment income, so its publication date alone does not settle a 2026 derivative liability.

Decision boundaries

Close before the member's deadline if the mandate cannot fund or receive delivery, provided an executable offset exists. A plan that relies on the last minute may fail during a halt. A profitable economic hedge can still default operationally when the variation and underlying cash arrive in the wrong order.

Practice and references

Exercise: a hypothetical short two-contract position with multiplier TRY 5 enters at 8,000 and settles at 8,100, 7,950 and 7,900. Solution: daily cash is −TRY 1,000, +TRY 1,500 and +TRY 500; cumulative +TRY 1,000. Starting TRY 8,000 collateral reaches a minimum TRY 7,000 after day one, despite a profitable ending. Fees and funding are excluded from this exercise to isolate cash timing.

Takeaway: Plan cash availability around settlement dates using the actual cash schedule, with every excluded cost and remaining exposure stated.

Reference card: viop-future. Formula: Daily futures settlement cash. Glossary: Physical delivery, Final settlement price. Next lesson: C3T1L5. Topic test.

Sources and verification date (2026-10-26):

Related product cards: viop-share-future.

Shared reference guide