Clearing, Settlement and Custody

Recently introduced products include weather derivatives, share

futures, flex options and ‘mini’ (smaller contract size than the

standard futures contract) contracts on for instance the FTSE and S

& P indices.

To understand the clearing and settlement of derivatives we need to

understand the characteristics of the products. So we can ask the

questions, what exactly are futures and options? What are swaps and

OTC options?

Derivatives

There is a lot of jargon surrounding the futures and options industry

and to make matters more confusing there is often more than one

word that has the same meaning. The generic term that is used is

derivatives. It encompasses ...