What Is the Role of the Clearing House in the Settlement of Options on Crypto Futures?
The clearing house acts as the central counterparty (CCP) to every trade, guaranteeing the performance of the contract. It manages the daily mark-to-market process, ensures margin requirements are met, and handles the final settlement of the option and the underlying futures contract.
This significantly reduces counterparty risk for all market participants.
Glossar
Clearing House
Settlement ⎊ A clearing house, within cryptocurrency and derivatives markets, functions as an intermediary between buyers and sellers, mitigating counterparty risk through a process of novation ⎊ replacing original trade agreements with new ones directly with the clearing house.
Margin Requirements
Definition ⎊ Margin requirements refer to the minimum amount of capital an investor must deposit and maintain with a broker or exchange to open and sustain a leveraged position in derivatives trading.