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Advisor Knowledge Center

Myth #3: When I buy an option I am taking the risk that whoever sold me the option may not be around when I want to sell or exercise this option.

Fact: The financial condition of the buyer or sellers of option contracts is not a matter of concern for investors. The counterparty to every option transaction is the Options Clearing Corporation or OCC, which guarantees the performance of the terms of listed option contracts. Should a party default on an option trade the OCC would ultimately make good on those contracts.

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