The Life Cycle of a Cleared Derivatives Trade

This chapter discusses the life cycle of a cleared derivatives trade, from the execution of legal documentation, to trade settlement. While there are specific steps within the life cycle of a cleared derivative, each step is conceptualized within two distinct phases: execution and clearing. There lies a very clear distinction between the execution of a trade and the submission of that trade for clearing. The author provides an early outline of the important phases in the execution and clearing of a derivative in the derivatives market that exists or in some cases will exist in the United States after the implementation of Dodd-Frank.