Clearing: Difference between revisions

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(Replaced content with "{{anat|brokerage|}} |{{clearing house}}")
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{{anat|brokerage|}}
{{anat|brokerage|}}
A [[clearing house]] is to protects the partierds to a transaction on an [[exchange]] from the counterparty credit risk they face to each other.
|{{clearing house}}
 
If one of the parties in the deal goes into default, the clearing house takes over the defaulting party's obligations and fulfils them (either themselves or by finding another market participant will to take over the contract)
 
[[Clearing house]]s require [[initial margin]] from both parties (as well as defasult fund contributions and other fun things) at the start of the contract which they use to manage the default.
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