The exchange delivery settlement price, abbreviated as EDSP, is the price at which exchange-traded derivative contracts are settled. Stock exchanges use EDSP to calculate how much each party to an options or futures contract owes when the contract expires.
The EDSP will be used by exchanges to calculate the difference between a derivative's traded price and its price at expiry. The difference between these two figures indicates whether an open position is in or out of the money.
If the exchange delivery settlement price at expiry is greater than the contract price, the buyer is in the money and the seller is out of the money. If the EDSP is less than the contract price at expiry, the seller will be in-the-money and the buyer will be out-of-the-money.

The Exchange Delivery Settlement Price (EDSP) is the final settlement price for futures or options contracts that are physically delivered. It is determined by the exchange on the last trading day of the contract. The EDSP is based on the underlying asset's spot price or another agreed-upon method, such as an average of closing prices during a specified period.

In practical terms, the EDSP helps calculate the value of the contract at expiration, guiding traders on the delivery amount or settlement needed. For physically settled contracts, the EDSP determines the asset's price at delivery. For cash-settled contracts, it's used to calculate the final cash settlement value. EDSP ensures transparency and consistency in final pricing, helping both buyers and sellers align.