The Option Clearing Corporation created the ______ system to protect itself from the actions of the writers.
A) margin
B) commission
C) order book
D) option pricing

Question

Quizplus · Accepted Answer

The margin system is used to protect the clearinghouse from the actions of writers (sellers) by requiring them to post a margin deposit. This deposit is used as collateral to cover potential losses that may arise from the exercise or assignment of options. The Option Clearing Corporation established the margin system to ensure the financial stability of the options market.

The Option Clearing Corporation Created the ______ System to Protect