Options Clearing Corporation. The organization that handles clearing of the options trades for the various options exchanges and regulates the listing of new options. It is regulated by the Securities and Exchange Commission, and is owned jointly by the U.S. stock exchanges that trade options (American Stock Exchange, Chicago Board Options Exchange, Pacific Exchange, and Philadelphia Stock Exchange). The fact that all listed options are cleared through OCC means that all options are free of default risk, since the OCC guarantees all option contracts.
Therefore, the buyer or a seller of an option only faces the credit risk of the OCC (which is minimal), not the credit risk of the counterparty. In order to manage risk, the OCC imposes margin requirements on all options brokers. The margin requirement depends on the particulars of each specific contract.

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exercise by exception option disclosure document