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[Music] hi guys im pratik singh and in this video were going to talk about settlement [Music] now settlement has changed a lot over the years and well talk about how settlement happens right now earlier in the module when we introduced the forwards contract where the buyer was paying money in exchange for gold if that transaction had gotten through then buyer would have paid a certain amount to the seller and received physical gold now that sort of settlement is called the physical settlement to make that clear a settlement is what happens after the expiry of a contract this is when the buyer and seller have to fulfill their obligations and a transaction is actually executed so in our earlier example where the gold was physically received that is a physical settlement which means that money is paid to receive the underlying physically now this also happens with respect to the stock market the settlement price is what you need to know next the settlement price is the closing price o
