What is the Options Clearing Corporation (OCC)?

The Options Clearing Corporation (OCC) is responsible for listing all options and controls the exercise and assignment process. The OCC provides a liquid market for traders and guarantees all options transactions.
What is the Options Clearing Corporation (OCC)?
Kirk Du Plessis
Apr 19, 2021

The Options Clearing Corporation (OCC) is jointly owned by the exchanges that trade options. The OCC issues all listed options and controls all exercises and assignments. We are lucky to have such an entity in the US markets because they provide a liquid market, guaranteeing all trades by acting as the counter-party to any purchase or sale of options.

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Physical vs. Cash Settlement Options
It is important to understand the difference between physical and cash settled options. Physical settlement of an options contract is the most common, and involves the actual delivery of the underlying security, like shares of stock. Cash settlement occurs when cash exchanges hands at settlement instead of an underlying security or physical commodity.

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