Clearing
Clearing is the process of checking trade details and establishing the obligations of buyers and sellers before settlement. It can include offsetting obligations and managing collateral; in centrally cleared markets, a clearing house becomes the counterparty to both sides.
In a hypothetical centrally cleared trade, the clearing house records each side’s obligations and calculates required collateral before settlement takes place.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure