Have you ever thought about how you would structure a fair settlement if you owned your own exchange?

It is a thought provoking question with a multitude of possible answers. If you have searched the internet comparing what different brokers and exchanges offer, you may have come across some of the interesting ways that settlement is reached.

You could employ a person claiming magical powers that would be able to foresee what fair settlement numbers lie in your future.

There is also the possibility of choosing a random number where the most traders are trading at a certain time.

You could mathematically invent a bizarre equation that would arrive at an acceptable settlement number causing you to exponentially increase your wealth.

The possibilities are endless but unless the structure for arriving at that settlement value is considered fair, the lawsuits and/or complaints could also be endless.

**CME: Chicago Mercantile Exchange**

Each exchange has its own fair way at arriving at settlement. The CME, being a famous exchange, nonetheless has defined its settlement procedure. You can visit its website by clicking

The CME takes the prices traded in the last 30 seconds and multiplies them by the volume during the same time, which provides the weighted value.

The weighted value is then divided by the total volume of the last 30 seconds to give the CME the settlement price rounded to one tick. This is done to prevent market manipulation on settlement values so that at the last second, one person or group cannot drive the price up or down by trading many contracts.

**NYSE Offers ByRD: Binary Return Derivatives**

The NYSE ByRD Settlement Value is reached by calculating the value of each trade, then dividing the total value of all the trades by the total number of shares traded.

This settlement value...