What is the role of exchange in derivative instruments?

[Divya]

Exchange plays the role of mediator in derivative instruments. In Futures the exchange collects the margin from both the buyer and seller, does the mark to market and on the expiry date makes the settlement for the deal happen. In options exchange settles the premium deal between the buyer and seller, does the mark to market on a daily basis and takes care of the final settlement.

[Anitha Ramesh]

The exchange is the mediator in derivative market.The exchange collects margin amount from both buyer and seller. Finally, the exchange do the settlement  between buyer and seller.

[Parthasarathy J]

Exchange plays the middle man role in derivative with help of caution deposit took from buyer and seller. It control the market malfunctioning with broker as buffer zone

[Dipakk Mehta]

They are responsible in receiving caution deposits from the buyers and sellers and deal the settlement in the right way

[Vineet Kumar Nair]

Exchange’s role is to ensure the trader’s counter party risk and the settlements.

[Author]

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