An option holder is able to look to the system created by OCC's Rules which includes the brokers and Clearing Members involved in a particular option transaction and to certain funds held by OCC - rather than to any particular option writer for performance. Prior to the existence of option exchanges and OCC, an option holder who wanted to exercise an option depended on the ethical and financial integrity of the writer or his brokerage firm for performance. Furthermore, there was no convenient means of closing out one's position prior to the expiration of the contract. OCC, as the common clearing entity for all exchange traded option.
