Trading & Market Structure

Clearing House

Definition

What is Clearing House?

An institution that clears trades, calculates obligations, and manages settlement and default risk.

Example in practice

The clearing house collects margin from futures traders.

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The highest price a buyer is currently willing to pay for a security.

The lowest price a seller is currently willing to accept for a security.

The difference between the best available buying and selling prices.

An instruction to buy or sell immediately at the best available prices.

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