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.

BREAKING DOWN '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.

  1. Option Disclosure Document

    A publication issued by the Options Clearing Corporation (OCC) ...
  2. Options Industry Council - OIC

    A cooperative formed in 1992 by U.S. options exchanges and Options ...
  3. Options On Futures

    An option on futures gives the holder the right but not obligation ...
  4. Exotic Option

    An option that differs from common American or European options ...
  5. International Clearing System

    A trading system used when a futures contract transaction is ...
  6. Listed Option

    An option that is sold on a registered exchange, such as the ...
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  1. What's Required for a Stock to Trade as an Option?

    Learn the four criteria companies must meet before options on their stock can be traded. Read Answer >>
  2. Where can I purchase options?

    In the United States, all options contracts go through one of several options exchanges. An investor must have an account ... Read Answer >>
  3. How can I find out which stocks also trade as options?

    The trading of options has become increasingly popular among retail investors as they become aware of the many different ... Read Answer >>
  4. Does the seller (the writer) of an option determine the details of the option contract?

    The quick answer is yes and no. It all depends on where the option is traded. An option contract is an agreement between ... Read Answer >>
  5. Why do option volume quotes differ on different websites?

    Option quotes are different in price and in volume because identical options can trade on more than one market or exchange. ... Read Answer >>
  6. How can derivatives be used to earn income?

    Learn how option selling strategies can be used to collect premium amounts as income, and understand how selling covered ... Read Answer >>
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