The Options Clearing Corporation (OCC)

The Options Clearing Corporation (OCC) is the main organization that manages and guarantees options and futures contracts traded on major exchanges. It acts as a central counterparty, ensuring that both buyers and sellers fulfill their obligations, which reduces the risk of default. When traders buy or sell options, the OCC clears the transactions by acting as the buyer to every seller and the seller to every buyer, providing stability and confidence in the derivatives market. Essentially, OCC makes options trading safer and more reliable by managing the risk and ensuring the smooth settlement of contracts.