Clearing Member Trade Agreement - CMTA

DEFINITION of 'Clearing Member Trade Agreement - CMTA'

An agreement by which an investor may enter derivative trades with a limited number of different brokers and later consolidate these trades with one brokerage house for clearing.

BREAKING DOWN 'Clearing Member Trade Agreement - CMTA'

When the position is consolidated, some brokers will 'give up' their position to the clearing firm. The positions should be cleared through the Options Clearing Corporation.

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RELATED FAQS
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    In the United States, all options contracts go through one of several options exchanges. An investor must have an account ... Read Answer >>
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    Short selling can be very risky for both the investor and the broker. Brokers will often tell investors that only stocks ... Read Answer >>
  3. How can an investor profit from the increase in popularity of discount brokerages?

    Find out how investors benefit when brokerages compete with each other, and how discount brokerages are changing the market ... Read Answer >>
  4. Why are most brokerage firms owned by banks?

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