Clearing Member Trade Agreement Law and Legal Definition

A clearing member trade agreement is an agreement whereby an investor uses different brokers to conduct trades. This is a document which establishes a working relationship between an investor and a brokerage house. However, at the end of the trading day, the investor is allowed to consolidate his/her trades with a single broker for clearing purposes. A clearing member trade agreement is used exclusively for options, futures, and other derivatives. Under the agreement, the investor is given the option of choosing among several brokerage houses to execute derivative trades.