Products & RisksQuestion 41 of 125
The Options Clearing Corporation (OCC) functions as:
a.The issuer and guarantor of listed options contracts
b.A broker-dealer that recommends option strategies
c.A federal agency that taxes option gains
d.A rating agency for options
Explanation
The OCC issues all listed options and acts as the central counterparty, guaranteeing performance so that buyers and sellers do not rely on each other's creditworthiness. It also standardizes contract terms and processes assignments, which supports a liquid secondary options market.
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