Sankar, this is a different (separate) problem of loses by option dealers. To the buyer, however, Options Clearing Corp is guaranteeing payment, if any. That is, a dealer, or the counterparty can be bunkrupt, yet the option contract is not from a sepecific party (in case of exchange traded options), but on obligation of OCC and Exchange. This is described in more detail in CBOE cite, e.g.
The particular dealers can get creamed, and there are some nearly every year, but the OCC ensures that contracts are honored - they have some money, and emergency credit lines, and insurance, etc.
Joe |
