# Clearing System Clearing denotes all activities from the time an option is written until it is settled. This process turns the promise of payment of an option's intrinsic value into the actual movement of funds from one account to another, considering the option expires in the money. Options are inherently risky [⚠️](https://emojipedia.org/warning/) and in the case of european style options writers are faced with a financial obligation towards options holders upon maturity of the option, proportional to the option intrinsic value and volume written. Hence the exchange is required to implement a set of risk management rules for ensuring that writers will, in the large majority of cases, fulfill their financial obligations. The options exchange collateral allocation model and its liquidation process are presented in the next sections. They've been designed to protect options holders against the risk of options writers defaulting their payment obligations, but at the same time with capital efficiency in mind as to allow writers a more flexible environment. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.defioptions.org/protocol/risk-management.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.