A clearing house is a financial institution that acts as an intermediary between buyers and sellers in a market. Its primary role is to facilitate the settlement of transactions, ensuring that both parties fulfill their obligations. By managing the risks associated with trading, clearing houses help maintain stability in financial markets. Clearing houses are commonly used in various markets, including stock exchanges and derivatives markets. They handle the confirmation, settlement, and delivery of trades, which helps reduce the chances of default. Examples of clearing houses include the Options Clearing Corporation and the Chicago Mercantile Exchange.