Options Clearing Corporation - OCC

AAA

DEFINITION of 'Options Clearing Corporation - OCC'

An organization that acts as both the issuer and guarantor for option and futures contracts. The Options Clearing Corporation operates under the jurisdiction of the U.S. Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). Under its SEC jurisdiction, the OCC clears transactions for put and call options, stock indexes, foreign currencies, interest rate composites and single-stock futures.


As a registered Derivatives Clearing Organization (DCO) regulated by the CFTC, the OCC provides clearing and settlement services for transactions in futures products, as well as options on futures. For securities lending transactions, the OCC offers central counterparty clearing and settlement services.

INVESTOPEDIA EXPLAINS 'Options Clearing Corporation - OCC'

Founded in 1973, the Options Clearing Corporation is the largest equity derivatives clearing organization in the world. The OCC's mission and values statement states, "OCC is a customer-driven clearing organization that delivers world-class risk management, clearance and settlement services at a reasonable cost; and provide value-added solutions that support and grow the markets we serve."


A clearing member dominated board of directors oversees the Options Clearing Corporation. Most of its revenues are received from clearing fees charged to its members; volume discounts on fees are available. Exchanges and markets that OCC serves include BATS Options Exchange; C2 options Exchange, Inc; Chicago board Options Exchange, Inc; International Securities Exchange, NASDAQ OMX BX, Inc; NASDAQ OMX PHLX, Nasdaq Stock Market; NYSE Amex Options; and NYSE Arca Options.

RELATED TERMS
  1. Clearing Member Trade Agreement ...

    An agreement by which an investor may enter derivative trades ...
  2. National Securities Clearing Corporation ...

    A subsidiary of the Depository Trust & Clearing Corporation ...
  3. Philadelphia Stock Exchange - PHLX

    The first securities exchange to be formed in the United States. ...
  4. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  5. Option Agreement

    1. A signed agreement between an investor who is seeking to open ...
  6. Listed Option

    An option that is sold on a registered exchange, such as the ...
Related Articles
  1. Introduction To Single Stock Futures
    Options & Futures

    Introduction To Single Stock Futures

  2. Derivatives 101
    Fundamental Analysis

    Derivatives 101

  3. Options Basics Tutorial
    Options & Futures

    Options Basics Tutorial

  4. Understanding The 2010 Options Symbology ...
    Options & Futures

    Understanding The 2010 Options Symbology ...

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center