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“There’s only a few members that can actually support some of the market makers and especially the cross margin program,” Andrej Bolkovic, OCC’s chief executive, said in an interview. “I think the market makers would like to see that change. That’s been a well known thing in the industry and something that we would also honestly support seeing change.”

The challenge for banks is that even if the clearing house involved agrees to give a customer a discount based on the level of net risk, the bank’s own capital framework may treat the two trades separately, requiring extra charges.

Patchwork Regulation

The patchwork US regulatory regime doesn’t help. Banks are regulated through the Federal Reserve System, broker dealers and the options market fall under the Securities and Exchange Commission, while futures, including equity futures, are the purview of the Commodity Futures Trading Commission. That means there are situations when a bank may give its customer the benefit of a cross-margin agreement, while still having to set aside funds itself to back the trade.

The rise of zero-day-to-expiry options and the explosion in retail trading volumes has brought new challenges for clearing members. Any move toward 24 hour, 7 day a week trading could put even more stress on the system and raise the bar higher for other firms to get involved.

The additional investment in upgrading capacity and technology to handle the greater volume and risk is likely to be passed on to clients. Bank of America has already raised the amount it charges clients per trade for options clearing, from between $0.02 – $0.03 to as much as $0.04, according to a person familiar with the matter.

Default Fund

OCC has proposed changing the way it calculates the proportion that each member pays into the roughly $20 billion default fund, to more fairly account for the market risks of each broker’s portfolio. That pot of money is designed to be big enough indemnify other members if the two largest clearing firms go bust at the same time.

Under the current system, 70% of the allocation is based on how a member copes with a roughly ~5% market move, according to Bolkovic. OCC has asked the SEC if it can change that metric to account for a more extreme scenario — a 1987-style market crash, when the Dow Jones Industrial Average plunged 22.6% in a day.

Clearing houses’ ongoing vigilance is itself a sign of strength, Donohue noted. “The regulatory and operational paradigm has adapted to better manage those kinds of risks.”

Donohue — who was OCC chairman from 2014 to 2025 — wants more institutions to step into the options clearing breach.

“If we could wave a magic wand and we could have more competition in that space, more clearing capacity, that was more distributed and dispersed and diverse, that would clearly be very beneficial for the market,” Donohue said.

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