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What exactly is the difference between a clearing house and a counterparty clearing house?

Personal Finance & Money Asked by user64832 on May 11, 2021

I know this may sound like a stupid question but I have not yet found an adequate definition of the two that can clearly tell me the difference between them.

2 Answers

Sometimes a clearing house is called a CCP or Central Counterparty. For exchange traded options, the Clearing House or CCP is the counterparty to every transaction.

I am not aware of any distinction though have not specifically heard the term "counterparty clearing house" on its own.

Answered by xirt on May 11, 2021

The main different is I supposed on its legal standing, a CCP novate the trade from two parties - thus become a part of trade, while clearing house guaranteed the trade settlement (not directly become part of the trade)

Answered by Peiyanto on May 11, 2021

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