Template:Clearing house

A clearing house is to protects the parties to a transaction on an exchange from the counterparty credit risk they have to one other.

If one of them defaults, the clearing house steps in to take over the defaulting party's obligations, and fulfils them (usually by finding another market participant to take over the contract)

Clearing houses require initial margin from both parties (as well as default fund contributions and other fun things like that) at the start of the contract which they use to manage the default.