THREAD:
I’m going to explain what a clearinghouse does and why it matters for exchanges, using only gifs from my favorite movie, the Big Short.
Clearing changed your life “more than Michael Jordan, the iPod, and YouTube put together”.
Let’s dive in
pic.twitter.com/k7nlJH52XY
Why does this matter? Clearinghouses help lower costs and improve trust in the system. These lower costs show up in the products we consume – companies can hedge the prices of commodities, interest rates and even stocks more efficiently with the help of clearinghouses.pic.twitter.com/xMEG0PgsrD
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Some real world clearinghouses in operation today: OCC – options DTCC – equities LCH – various CME Clearing - futures Eurex Clearing – various ICE Clear US & Europe – futures ICE Clear Credit – credit default swaps Give them a high five!pic.twitter.com/IrfrcdWgUX
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Thank you for reading – hopefully this thread taught you something. Be like Ben Rickert and mask up!pic.twitter.com/lYPf6nAXtl
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