Settlement of an iron ore contract

 The daily settlements include:

• Daily mark-to-market settlement
• Fee settlement

Daily mark-to-market settlement

All cleared iron ore contracts are future contracts with cash settlement. Open positions are subject to daily mark-to-market settlement settled every day on the member’s collateral and settlement account. The daily mark-to-market settlements are calculated based on the change in the closing prices from one day (closing T-1) to the next (closing T) for all open contracts. The closing price is the market price set at the end of the trading day for each future contract.

The mark-to-market settlement is calculated from the day the trade is done to the last day in the settlement period. The last day in the settlement period the final settlement for the contract will take place and is calculated based on the settlement price for each contract. If a contract is closed prior to settlement, the profit or loss is realised the same day.

Fee settlement

The clearing fee is calculated and settled the same day as the contract is traded. The fee is included in the daily settlement transaction sent to the bank at the end of day and is shown on your "daily summary report" and "tick-by-tick report".