What occurs if physical delivery for futures contracts is excluded?

When physical delivery for futures contracts is excluded, the rights and obligations of the contract are effectively settled through a cash settlement process. This means that instead of the actual underlying asset being delivered at the contract's expiration, the final settlement value is determined and the parties involved simply exchange the cash difference based on the last daily settlement price.

The statement that all rights and obligations are deemed to be performed upon the last daily settlement payment accurately reflects this concept. In cash-settled contracts, participants do not need to worry about the logistics of transferring physical assets; instead, the financial aspect is concluded through a net payment. This process ensures that all contractual obligations are regarded as fulfilled when the final payment is made based on the prevailing prices.

Options that suggest positions are closed at the last traded price, the opening price of the previous day is used for settlement, or that none apply, do not accurately represent the nature of cash-settled futures contracts, where obligations are settled financially rather than through physical delivery.