A clearing house is an intermediary between buyers and sellers of financial instruments.
Further, it is an agency or separate corporation of a futures exchange responsible for settling trading accountsclearing trades, collecting and maintaining margin moniesregulating delivery, and reporting trading data. Clearing houses act as third parties to all futures and options contractsas buyers to every clearing member seller, and as sellers to every clearing member buyer. When two investors agree to the terms of a financial transaction, such as the purchase or sale of a security, a clearing house acts as the middle man on behalf of both parties.
The purpose of a clearing house, therefore, is to improve the efficiency of the markets and add stability to the financial system. The futures market is most commonly associated with a clearing house, since its financial products are complicated and require a stable intermediary.
SEBI names 3 qualified clearing houses for securities market | Business Line
Each futures exchange has its own clearing house. All members of an exchange are required to clear their trades through the clearing house at the end of each trading session and to deposit with the clearing house a sum of clearing agent stock market - based on clearinghouse margin requirements - sufficient to cover the member's debit balance.
For example, if a member broker reports to a clearing house at the end of the day the total purchase ofbushels of May wheat and total sales of 50, bushels of May wheat, he is net long 50, bushels of May wheat. Because all members are required to clear history of stock brokerage firms in new york trades through the clearing house and must maintain sufficient funds to cover their debit balances, the clearing house is responsible to all members for the stable currency for binary options of the contracts.
There are two major clearing houses in the United States: The New York Clearing agent stock market Exchange NYSE and the NASDAQ. The NYSE, for example, facilitates machine trade binary options profitably trading of stocks, bonds, mutual funds, exchange-traded funds ETFs and derivatives.
It acts as the middle man in an auction market that allows brokers and other investors to buy and sell securities to people by matching the highest bidding price to the lowest selling price. Unlike the NASDAQ, the NYSE has a physical trading floor.
NSE - National Stock Exchange of India Ltd.
Dictionary Term Of The Day. A measure of what it costs an investment company to operate a mutual fund.
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