Chapter 04 · Section 4.1

Summary

• The clearing house ensures the financial integrity of the options market and guarantees against the default of a clearing member.
• All clearing members must be well-capitalized.
• Clearing house may increase margin requirements in delicate markets.
• If clearing member fails to meet margin call, positions are liquidated.
• Clearing member remains responsible for any loss that might remain.
• If these provisions are inadequate, five layers of protection are invoked:
• The clearing member's margin deposit
• Clearing member's guarantee fund contribution
• The clearing house surplus fund
• Guarantee fund contribution of other clearing members
• Additional contributions of other clearing members.