Ways to make up for the risks undertaken by clearing companies. Therefore, when the buyer decides to perform the contract, he needs to ask the broker first, and then the broker summarizes the performance requirements and then transfers them to the settlement company.
The clearing company randomly selects a broker from all the open seller positions of the option, and the selected broker selects one from all the customers who still hold the seller positions of the option after receiving the notice from the clearing company.
Fulfill the contract. There are also some brokers who decide to perform the contract in a first-in-first-out way, that is, the customer who holds the position of the option seller first will be designated to perform the contract. In principle, as long as the selection method is fair, just and open, and approved by the exchange.
Meaning, can be implemented.
Although the index option is a spot option, it does not need cash delivery when performing the contract, but is settled in cash. The rule of the liquidation company is that the executor must make a request before the end of the daily transaction.
Fixed, brokers usually set an earlier deadline. After receiving the performance requirements of the settlement members, the settlement company also decides the settlement members who should perform the contract by drawing lots, and then the settlement members choose a customer.
The customer performs the contract. Before the market opens the next morning, the selected customers will be informed that they must pay the price value to the traders who require performance.
Similarly, index options also have automatic performance clauses. As long as the intrinsic price of the index option exceeds 0.25 points on the last day of the exercise period, the clearing company will automatically execute it.