Clearing house

The main task of the clearing houses is to settle and fulfill the transactions concluded by the market participants.

Let's imagine a complicated, multi-stakeholder transaction on the stock market or over-the-counter: for the sake of example, let it be the spot sale and purchase of a share. 

Sellers of the given security: 

"A" who wants to sell 500 of this stock at some price. 

"B" also has 150 units to sell for the same amount, 

"C" has 60 shares.

Opposite them are the customers: 

"X" wants to buy 400 shares, 

"Y" 180, 

And "Z" would be satisfied with 130 pieces.

For simplicity, the exchange rate should be the same as the seller's.

If they were to try to do this separately, in pairs, it would be very difficult for them to get the deals together. However, if an imaginary actor steps in between them, who sums up the buy and sell rate needs and conducts the deals, the situation is immediately resolved. This actor is the clearing house.

The reality is, of course, much more complicated than our example. Countless commodities are traded on the world's spot or derivative markets within the framework of many different order options. Therefore, safe trading of securities, currencies and commodity market products would become almost impossible without clearing houses.