Benefits of a CCP

The primary role of a CCP is to act as a central counterparty to clearing members and in doing so, reduce their counterparty risk.  A CCP also indirectly facilitates increased liquidity in the market and enables members to net off their long and short positions which ultimately reduces the costs of trading.

The small number of defaults in the markets since the clearing house was first established in 1888 is testiment to the efficiency and security of the model.