For cash-settlement contracts, final settlement closes everyone out against an externally calculated number such as a special-opening-quotation or a published index. For deliverable contracts it converts the futures position into an obligation to make or take the physical commodity.
This is the sharp edge of the calendar: it is where a position that was a trade becomes a legal obligation, and where illiquid conditions can produce prices no screen showed.
Example: ES final settlement on expiry Friday is the S&P 500 special opening quotation, computed from each constituent's opening print — a level that may never appear as an S&P index tick.
Related: cash-settlement, physical-delivery, special-opening-quotation, last-trading-day, settlement