If a physical delivery put option is exercised, the assigned writer must purchase the required number of shares at the specified exercise price regardless of their current market price. If a cash-settled option is exercised, the assigned writer must pay the cash set- tlement amount. No certificates are issued to evidence options. In- vestors look to the confirmations and statements that they receive from their brokerage firms to confirm their positions as option holders or writers. An option holder looks to the system created by OCC's rules. rather than to any particular option writer. for perform- ance of the option he owns. Similarly, option writers must perform their obligations under the OCC system and are not obligated to any particular option holder. Since every options transaction involves both a holder and a writer, it follows that the aggregate rights of op- tion holders under the system are matched by the aggregate obligations of option writers. The OCC system is designed so that the perform- ance of all options is between OCC and a group of firms called Clearing Members that carry the positions of all option holders and option writers in their ac- counts at OCC. To qualify as a Clearing Member, a firm must meet OCC's financial requirements. In addition, Clearing Members must provide OCC with collateral for the positions of option writers that they carry and must contribute to Clearing Funds that protect OCC against a Clearing Member's failure. The Clearing Members' guarantees of the performance of options writers' obligations, the financial strength of the Clear- ing Members, the collateral that they deposit, the obli- gations of correspondent clearing corporations, and the Clearing Funds together make up the OCC system backing the performance of options. This system is discussed in more detail in the OCC prospectus re- ferred to in paragraph 1 of Chapter Xl. EXERCISE PRICE—In the case of a physical delivery option, the exerci