Modern finance · 1950s–1990s
1982
Cash settlement
Stock index futures start trading, paid out in cash instead of shares.
In 1982 US exchanges launched futures on stock indexes, first the Value Line index in Kansas City and then the S&P 500 in Chicago. Nobody could deliver a whole index, so contracts were settled in cash against an official settlement price. Index options followed in 1983.
💡 Why it made sense then
Paying the difference in money made it possible to trade on a whole market without handing over hundreds of different shares.
🎮 In Journey Shares
Game options settle in play money against a 24-hour average price, so one late trade can't decide the payout.
Ideas it gave us
- 🔮 Settlement price
A settlement price is the official price used to work out what a futures or options contract pays when it expires.
Practise with $10,000 in play money
Free. No real money involved.