What is the role of exchange in derivative instruments?

[davidrajan]

Exchange facilitates smooth trading of derivative invesment

They collect margin amount from traders

 

[Ravishankar]

Exchange will make sure of smoother transaction and settlement based on MTM method.

[Vinoth Kumar]

Exchange Facilitates Smooth Trading.

[Aravind]

Exchange creates the derivative instruments and the rules and regulations reqiured for a trader to trade on derivatives.

Exchange facilitates collection of  margin from future contract buyers / sellers and  also collect premiums in case of call option sellers and from Put option buyers. The amount is refundable once the contract is closed.

Exchange facilitates settlement on daily basis in case of future and till contract expiry in case of options.

In case of settlement issues , it deals with brokers on settlements using broker’s deposit.

[Christopher]

Exchange facilitates smooth trading, and manages settlement on a daily basis.

[Author]

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