Understanding Exchange-Traded Derivatives

In the context of derivative markets, exchange-traded derivatives are financial instruments that are standardized and traded on regulated exchanges. These derivatives allow investors to hedge risks or speculate on price movements. One common type of exchange-traded derivative is a futures contract, which obligates the buyer to purchase, and the seller to sell, a specific asset at a predetermined price at a specified future date.

Consider the following statements regarding exchange-traded derivatives:

1. They often have lower counterparty risk compared to over-the-counter derivatives.
2. They are customized to specifications determined by the contracting parties.
3. They are settled through a clearinghouse, which guarantees the transactions.

Which of the following statements about exchange-traded derivatives is correct?