What is Clearing?
Think of clearing as your safety net in futures trading. It stands between every buyer and seller, ensuring that every trade is honored – no matter what happens in the market.
Why It Matters to You
- Your trades are guaranteed
- Your risk is managed
- Your funds are protected
- Your counterparty concerns disappear
How It Works When you make a trade, exchange clearing becomes:
- The buyer for every seller
- The seller for every buyer
How the system works (with slight variations between exchanges)
- Daily Mark-to-Market
- Your positions are valued every day
- Gains and losses are settled in cash
- No debt can accumulate
- Performance Bonds (Margin)
- Security deposits that protect against market moves
- Calculated twice daily for most products
- Cover 99% of potential market volatility
- Can be cash or approved collateral
Exchange clearing constantly monitors:
- Market exposures
- Trading positions
- Member financial health
- Risk concentrations
Why This Matters for Your Trading
- Trade with confidence knowing your counterparty risk is managed
- Access multiple markets through one clearing system
- Benefit from sophisticated risk management
- Keep your funds segregated and protected
This robust clearing system has evolved over decades to provide you with secure, efficient access to global futures markets.