when a clearinghouse encounters an out trade it gives the counterparties a chance to reconcile the discrepancy independently if the parties can resolve the matter they resubmit the trade to the clearinghouse for appropriate settlement but if they cannot agree on the terms of the trade then the matter is sent to the appropriate exchange committee for arbitration 
an automated clearing house ach is an electronic system used for the transfer of funds between entities often referred to as an electronic funds transfer eft the ach performs the role of intermediary processing the sending receiving of validated funds between institutions an ach is often used for the direct deposit of employee salaries and can be used to transfer funds between an individual and a business in exchange for goods and services traditionally the sending and receiving bank account information needs to be provided including the account and routing numbers to facilitate the transaction this process may also be seen as an electronic check as it provides the same information as a written check example of clearingas a hypothetical example assume that one trader buys an index futures contract the initial margin required to hold this trade overnight is 6 160 this amount is held as a good faith assurance that the trader can afford the trade this money is held by the clearing firm within the trader s account and can t be used for other trades this helps offset any losses the trader may experience while in a trade this process helps reduce the risk to individual traders for example if two people agree to trade and there is no one else to verify and back the trade it is possible that one party could back out of the agreement or experience financial trouble and be unable to produce the funds to hold up their end of the bargain the clearing firm takes this risk away from the individual trader each trader knows that the clearing firm will be collecting enough funds from all trading parties so they don t need to worry about credit or default risk of the person on the other side of the transaction 