Series 7 practice questioneasyOptions — OCC Role
The Options Clearing Corporation (OCC) serves which primary function?
- AIt regulates options exchanges
- BIt determines which stocks will have listed options
- CIt sets margin requirements for options
- DIt guarantees the performance of all listed options contracts✓ Correct answer
Explanation
Why D — It guarantees the performance of all listed options contracts
The OCC is the issuer and guarantor of all listed options contracts traded on U.S. exchanges. It stands between the buyer and seller, guaranteeing that the terms of the contract will be fulfilled. This eliminates counterparty risk and ensures the integrity of the options market.
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