Settlement

(1) The completion of a transaction, wherein the seller transfers securities or financial instruments to the buyer and the buyer transfers money to the seller. The obligations are discharged. Stock exchange: The price used for daily revaluation of open positions.
(2) with credit default swaps, what occurs in the case of a credit event. Settlement can be cash or physical delivery, depending on the terms of the contract. Traditionally, CDS specified physical delivery but in the last years numerous auctions
have been held to allow for cash settlement.