How the Settlement Value Is Set: Closing Price or Opening Price?
At expiration, what a contract is worth is not set by the last traded price, but by an official settlement value computed by the exchange. 0DTE options and the standard monthly contract do not use the same settlement value: one settles on the close, the other on the open. Knowing which is which keeps you from miscalculating your P&L on expiration day.
0DTE settles on the closing price
0DTE is a same-day SPXW contract that settles in the afternoon: trading runs until the 4:00 p.m. ET close (1:00 p.m. on half-day holidays), and the settlement value is the official closing value of the S&P 500 index that day.
The settlement value is computed from the closing prices of all 500 component stocks: it is not any single option's traded price, but the index's official value at the close.
The closing price is the settlement value — no separate ticker to look up: the closing price you see on a quote screen is the number used for settlement.
European exercise, cash settlement: the option can only settle at expiration, never early; any in-the-money amount is paid in cash, no shares change hands.
The standard monthly contract settles on the opening price
The standard SPX contract expiring on the third Friday of the month uses the SET: SET is the Special Opening Quotation, computed from each of the 500 component stocks' opening prices on expiration morning, and published by Cboe under the ticker SET.
This series stops trading the day before expiration: usually you can no longer trade it after Thursday's close, and the settlement value is only fixed at Friday's open — the market can gap overnight in between.
Two different contracts expire on the same third Friday: the morning-settled standard SPX contract and the afternoon-settled SPXW contract are not the same contract, even though the date matches.
The date alone does not tell you AM or PM settlement: check whether the contract is a standard monthly or a weekly / daily expiration.
Don't confuse the settlement value with the last traded price
The last traded price is the price of the most recent trade; the settlement value is an official computed number: the two are usually close, but they are not the same thing.
For 0DTE, the settlement value is the closing price: close to the last quoted spot price, but the official closing value is what counts.
For the monthly contract, the settlement value is Friday's opening price: it can differ a lot from Thursday's last traded price, because the overnight gap lands straight in the settlement value.
How much is in the money is measured against the settlement value: for a call, the amount the settlement value is above the strike; for a put, the amount the strike is above the settlement value — times $100 per point; out-of-the-money contracts expire worthless. (Example numbers only: settlement value 7,320, put strike 7,350 — 30 points in the money, about $3,000 in settlement cash; not live market data.)
How to practice this in the simulator
The simulator does not auto-settle positions at the settlement value: close your positions yourself before the close — don't hold past the bell betting on the settlement value.
No new positions after 3:30 p.m. ET, and a prompt to flatten by 3:55 p.m.: prices move fast into the close, and stopping early avoids the hardest stretch to price.
At review time, compare the closing price with your strikes: work out what holding to settlement would have been worth, then compare it with the price you actually closed at, and see what closing early cost or saved you.
Start with 1 long single-leg contract: understand one expiration settlement first, then practice spreads.
This simulator uses real CBOE option chains delayed about 15 minutes, starts with $10,000 in virtual funds, charges $0.65 per contract per side in fees, and shows P&L net of fees; short-sale margin is a simplified simulated rule at 20% of the strike, not a real broker margin. The simulator is for practicing orders, discipline, and review. It is not investment advice and promises no returns.