What is a clearing house and how can they guarantee that I get paid?
The clearing house serves many purposes. First, it ensures that all trading members have the proper asset levels, credit history and liquidity to trade. Once this due diligence has been done, the clearing house is able to take on the counter-party risk mentioned above, meaning once you execute your trade, they become your counterparty. They have vetted all their members – and feel comfortable that there will not be any defaults. With that in mind, they are willing to guarantee their members that in the rare case that someone does default, the clearing house will make good on any trades that the defaulting member is responsible for.
