GCMs are another fundamental party to trading FFAs, with whom you must onboard in order to gain access to the cleared market.

They have been approved by the clearing house for the purpose of clearing transactions on behalf of their clients. They are a guarantor and payment agent for trades and sit between the client and the clearing exchange to be the contractual counterparty for both, so that no contractual relationship will arise between the clearing house and the GCM client.

The GCM itself is a commercial bank or financial institution that will hold the required collateral for each trade, manage the flow of that collateral to the clearing house, and also receive any funds from the clearing house, on behalf of their client.

The FFA brokers are also able to guide on this process and point you towards GCMs that specifically cover freight, so do also speak to them about help with setting up a clearing account.