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Options Clearing Corporation

OCC. The organization that handles Clearing of the options trades for the various options exchanges and regulates the Listing of new options. It is regulated by the Securities and Exchange Commission, and is owned jointly by the U.S. stock exchanges that Trade options (American Stock Exchange, Chicago Board Options Exchange, Pacific Exchange, and Philadelphia Stock Exchange). The fact that all Listed options are cleared through OCC means that all options are free of Default risk, since the OCC guarantees all option Contract. Therefore, the buyer or a seller of an Option only faces the Credit risk of the OCC (which is minimal), not the Credit risk of the counterparty. In Order to manage risk, the OCC imposes Margin requirements on all options Broker. The Margin requirement depends on the particulars of each specific contract.

Related Terms: 38 ACH, American Stock Exchange, Buy, Broker, Clear, Clearing, Commission, Credit risk, Chicago Board Options Exchange, Contract, Credit, Default, Default risk, Exchange, ECU, ECI, Guarantee, Inc., Impose, Joint, Listed, Listing, Listed option, Margin, Mean, Order, Option, OCC, Option contract, Own, Party, Risk, Ring, SEC, Securities and Exchange Commission, Sell, Stock exchange, Trade
Other Related Pages: Category: Options Starting With: O
Semi Related Terms: 820 CLICK HERE TO VIEW
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