The Options Clearing Corporation

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The Options Clearing Corporation (OCC)
Image:OCC green.jpg
Founded 1973
Headquarters Chicago
Key People Wayne P. Luthringshausen, Chairman and CEO; Michael E. Cahill, President and COO
Products Clearing services
Web site www.optionsclearing.com

The Options Clearing Corporation (OCC), founded in 1973, is the world's largest equity derivatives clearing organization. OCC is dedicated to promoting stability and financial integrity in the marketplaces by focusing on sound risk management principles. By acting as guarantor, OCC ensures that the obligations of the contracts it clears are fulfilled.

As the marketplace evolves, so do OCC's clearing capabilities. Although OCC began as a clearinghouse for listed equity options, the firm has grown into a globally recognized entity that clears a multitude of diverse and sophisticated products. OCC operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Under its SEC jurisdiction, OCC clears transactions for put and call options on common stocks and other equity issues, stock indexes, foreign currencies, interest rate composites and single-stock futures (which are dually regulated by the SEC and CFTC) in the U.S. As a registered Derivatives Clearing Organization (DCO) under CFTC jurisdiction, OCC also provides clearing and settlement services for transactions in futures and options on futures.

Overseeing OCC is a clearing member dominated board of directors. OCC operates as an industry utility and receives most of its revenue from clearing fees charged to its members. OCC offers volume discounts on fees and, as applicable, refund excess fees to its clearing members. Based in the U.S., OCC was the first clearinghouse to receive a AAA-Credit Rating from Standard & Poor's Corporation.

OCC's participant exchanges include: American Stock Exchange, Chicago Board Options Exchange, International Securities Exchange, NASDAQ Options Market, NYSE Arca, Philadelphia Stock Exchange, and the Boston Stock Exchange. Its clearing members serve both professional traders and public customers and comprise approximately 130 of the largest U.S. broker-dealers, futures commission merchants and non-U.S. securities firms. OCC's goal is to service clearing members and the exchanges through an operating plan that emphasizes timely, reliable and cost-efficient clearing operations.

OCC also serves other markets, including those trading commodity futures, commodity options, and security futures. OCC clears commodity contracts traded on CBOE Futures Exchange and Philadelphia Board of Trade, respectively, as well as security futures contracts traded on OneChicago.

Contents

History

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The Options Clearing Corporation (OCC) was founded in 1973, initially as a clearinghouse for five listed markets for equity options. Prior to its establishment, and due to a great deal of "encouragement" from the SEC, the Chicago Board Options Exchange had its own clearing entity, the Chicago Board Options Exchange Clearing Corporation.

As the marketplace evolved, so did OCC's clearing capabilities. Today the organization has grown into a globally recognized entity that clears a multitude of diverse products.


Leadership

Executives:

Board Members: [1]

Comprehensive Options Expiration Calendar

Though it may be no surprise when your normal, run-of-the-mill option expires, because OCC clears for all U.S. options exchanges, here's an easy way to find out about all options, equity index options, etc., in one color-coded glance (OCC Options Expirations).

Options Symbology

The Options Symbology Initiative (OSI), is an industry plan to change the way options contracts are presented in trade and post-trade processing. The plan replaces the alpha codes and fractional pricing currently used to represent listed options contracts with an explicit series key and decimal strike prices. The current processing method that has been in use for the past 25 years poses a number of limitations in today's marketplace. OCC along with the U.S. options exchanges, in late October 2007 announced they had achieved a key milestone in the OSI with the release of implementation plans for the record layout changes that take effect June 30, 2008.

When the OSI is fully implemented, most options symbols will match the underlying security symbol which will reduce corporate action symbol conversions, eliminate the need for wrap symbols and the LEAPS rollover process, thereby reducing errors in front, middle and back office processes, while providing flexibility in new product development at the exchanges. This multi-year effort is expected to conclude in February 2010.[2]

Resources

The Options Clearing Corp. web site [1]

OCC Annual Reports

References

  1. ↑ Board Member Biographies. The Options Clearing Corporation. Retrieved on May 23, 2008.
  2. ↑ Options Symbology Initiatives. The Options Clearing Corp.. Retrieved on November 5, 2007.
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