The clearing corporation has a net position equal to ________.
A) the open interest
B) the open interest times 2
C) the open interest divided by 2
D) zero

Question

Quizplus · Accepted Answer

The clearing corporation's net position is always zero. This is because when a trade takes place, the clearing corporation becomes the buyer to every seller and the seller to every buyer, effectively cancelling out the open interest. Therefore, the clearing corporation does not have a directional position in the market and its net position remains at zero.

The Clearing Corporation Has a Net Position Equal to ________