Options Clearing Corporation - OCC

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.



comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center