What type of firms clear their own transactions?

The correct answer is that full-service firms clear their own transactions. Full-service firms typically provide a wide range of investment services, including trading, investment advice, and asset management. These firms have the infrastructure in place to handle the clearing and settlement of their own transactions, allowing them to offer comprehensive services to clients.

By clearing their own transactions, full-service firms can manage the entire process, which includes ensuring that the financial securities are exchanged correctly and that the necessary funds are in place. This capability enhances the firm's ability to provide personalized service and facilitate customer needs.

In contrast, introducing firms primarily act as intermediaries and rely on clearing firms or third parties to handle the actual transaction clearing and settlement processes. Discount brokerage firms and online trading firms often focus on providing lower-cost access to trading services and may utilize third-party firms to clear transactions rather than managing it themselves.