Uncovered Options Trading System
Clearing Member: Clearing member is a member of an exchange clearinghouse responsible for the financial commitments of its customers (a member of clearing organisation). All trades of a non-clearing member must be registered, processed and eventually settled through a clearing member.
Clearing Organization: An entity through which futures and other derivative transactions are cleared and settled. It is also charged with assuring the proper conduct of each contract's delivery procedures and the adequate financing of trading. A clearing organization may be a division of a particular exchange, an adjunct or affiliate thereof, or a freestanding entity. Also called a clearing house, clearing association or multilateral clearing organization.
Proprietary Account: Proprietary Account is an account that a futures commission merchant carries for itself or a closely related person, such as a parent, subsidiary or affiliate company, general partner, director, associated person, or an owner of 10 percent or more of the capital stock. The Futures Commission Merchant (FCM) must segregate customer funds from funds related to proprietary accounts.
Trading Floor: Trading Floor is a physical trading facility where traders make bids and offers via open outcry or the specialist system.
Transaction: Transaction is an entry or liquidation of a trade.
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Naked options trading is very risky - many people lose money trading them. It is recommended contacting your broker or investment professional to find out about trading risk and margin requirements before getting involved into trading uncovered options.