A central counterparty clearing house (CCP) is an organisation, usually operated by major banks, that exists to help facilitate derivatives and equities trading. The aim of a CCP is to introduce efficiency and stability into financial markets.
A CCP guarantees the performance of contracts, and steps in if there is a default for cleared products. To cover their risks they collect margin, in particular Initial Margin and Variation Margin, from their clearing members.
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Margin Management Guide | What Are the Best Practices?
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