Counterparty Risk
Counterparty risk refers to the risk of default of one party in a particular transaction. Credit ratings can be used to evaluate counterparty risk.
Counterparty
A counterparty is a person which whom a market participant (such as a stockbroker) makes a trade. Typically, each participant is the other's counterparty for any trade made.
Counterparty
Counterparty definition :
The other participant, including intermediaries, in a swap or contract.
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Counterparty Risk
(1) The risk that the other party to an agreement will default.
(2) In an options contract, the risk to the option buyer that the option writer will not buy or sell the underlying as agreed.
Counterparty Risk
The risk that each party of a contract faces that the other party will default on their obligations.
CPO (Community Pool Operator)
Person who holds investment responsibilities for a commodity pool's assets.
Counterparty
The participant with whom a trade is being transacted.
Coupon
This is a regular payment received by the bondholder over the lifetime of the bond. The coupon rate is expressed as a percentage of the face value of the bond.
Counterparty
The other participant, including companies, in a swap or contract.
Counterparty
Party on the other side of a trade or transaction.
Counterparty Risk ...
counterparty risk
The risk that a counterparty will default (fail to perform) on its obligation under a contract.
Counterparty risk
Counterparty risk is the risk that the person or institution with whom you have entered a financial contract - who is a counterparty to the contract - will default on the obligation and fail to fulfill that side of the ...
Counterparty
The customer or bank with whom a foreign exchange or over-the-counter options deal is made. The term is also used in interest and currency swaps markets to refer to a participant in a swap exchange.
Counterparty initiation refers to the first time a company wishes to enter a transaction with a proposed counterparty.
Counterparty
The party with whom one contracts, used especially in over-the-counter derivatives transactions.
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The counterparty fails to make the settlement payment for the contract's market value.
See also: Counterparty Risk, Country Risk, Liquidity Risk, Political Risk, Price Risk, Reinvestment Risk, Risk, Risk Averse, Risk/Return Tradeoff, Systematic Risk, Unsystematic Risk
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END USER - A counterparty who intends to own the position. Contrast with a counterparty such as a deale...
END-OF-YEAR CONVENTION - Treating cash flows as if they occur at the end of a year as opposed to the da...
Receive fixed counterparty
The transactor in an interest rate swap who receives payments based on the fixed rate and makes payments based on the floating rate.
PFE is a measure of counterparty risk/credit risk. It is calculated by evaluating existing trades done against the possible market prices in future during the lifetime of transactions. It can be called sensitivity of risk w.r.t market prices.
Search costs Costs associated with locating a counterparty to a trade, including explicit costs (such as advertising) and implicit costs (such as the value of time). Related: Information costs.
In securities trading, where a clearing house becomes counterparty to each side of a trade, after the trade has been agreed. This is necessary to facilitate netting, and reduce counterparty risk exposure.
counterparty risk Counterparty risk refers to the danger either side of an agreement will not... country risk When speaking of international investments, this refers to the added risk associated...
Settlement risk The risk that one party will deliver and the counterparty will not be able to pay and vice versa.
Fixed-rate payer In an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a floating-rate payment. Flat Used in the context of general equities.
Convertibles: earning interest on the date of payment only.
Wrong-way risk This type of risk occurs when exposure to a counterparty is adversely correlated with the credit quality of that counterparty. There are two types of wrong-way risk.
A limited price order that is to be executed in its entirety or not at all (no partial transaction), and thus is testing the strength/conviction of the counterparty.
Counterparty Risk
Risk that one party in an agreement defaults on its obligation to repay or return securities. Also known as default risk....(Read more)
Country-specific Risk ...
Herstatt risk The risk of loss in foreign exchange trading that one party will deliver foreign exchange but the counterparty financial institution will fail to deliver its end of the contract. It is also referred to as settlement risk.
Prime broker - prime brokerage services include lending money, acting as counterparty to derivative contracts, lending securities for the purpose of short selling, trade execution, clearing and settlement.
This document lists: aging limits cash limits concentration limits contract limits conversion limits counterparty limits country limits cpv adjusted values cross border limits currency limits day trading limits delta adjusted limits dollar loss ...
The central clearing counterparty for exchange-traded derivative products, such as options and futures, in Canada.
The result is that if one counterparty bankrupts, that counterparty cannot seek to collect on any swaps that are in-the-money to them while at the same time refusing to pay out on any that are out-of-the-money.
Rules in place at the Chicago Mercantile Exchange that authorize a member firm which receives a large order from an initiating party to solicit counterparty interest off the exchange floor prior to open execution of the order in the pit and that ...
With a trade on an exchange a clearing house steps in when a counterparty defaults, ensuring that the transaction is completed. But most OTC trades are not cleared, exposing firms - and the financial system - to counterparty risk.
The offsetting with a counterparty of financial obligations payments one is owed with those one is entitled to receive, thus reducing the costs arising out of payments settlements.
Also called a swap assignment, a transaction that ends one counterparty's role in an interest rate swap by substituting a new counterparty whose credit is acceptable to the other original counterparty.
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A typical CDS contract features one counterparty agreeing to "sell" protection to another. The "protected" party pays a fee each year in exchange for a guarantee that if a bond goes into default, the seller of protection will provide compensation.
Nonutility generators now had access to any willing counterparty in the region, and a new industry of power marketers that handled less than 8 million mwh in 1995 traded more than 1.5 billion in 1999.
Costs associated with locating a counterparty to a trade, including explicit costs (such as advertising) and implicit costs (such as the value of time). Related: information costs
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Default is the failure of a debtor or a counterparty to a deal to carry out their obligation. Default occurs when the maturity of a debt or a security passes and a payment due on it is not made.
Definition: [crh] An interest rate swap designed to end a counterparty's role in another interest rate swDefinition: ap, accomplished by counterbalancing the original swap in maturity, reference rate, ...
Subject to Downgrade Risk - Since holders of ETNs are subject to counterparty risk, their ETN investment could lose value if the underwriter of the note experiences a credit downgrade, even if the fundamentals of the underlying note remain strong.
Dollar Roll - A type of repurchase transaction in the mortgage pass-through securities market in which the buy side trade counterparty of a "to be announced" (TBA) trade agrees to a sell off the same TBA trade in the current month and to a buy ...
Credit Risk
The risk of loss one assumes under a financial contract that a borrower or a counterparty to a derivatives contract may default or fail to perform its obligations.
In relation to foreign exchange transactions, the exposure of one party to another on the value date of the contract. It is the risk that one party, having received settlement of one currency amount from the counterparty, ...
thestreetratings.com there is not default risk from the counterparty since participants must post a performance bond. Default risk from the exchange itself remains, however. (See also 'Forward Contract.') ...
Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could ...
I would like to put a precaution on using ETFs: When using ETFs to buy gold, you remove one very important element -- physical gold has no counterparty risk, but ETFs do.
Securities dealers use repurchase agreements to finance their inventories, selling their inventories to counterparty investors (for instance, a money market mutual fund) that have excess short-term funds they want to invest in higher-yielding ...
[Harvey] bankruptcy risk The risk that a counterparty, which owes your institution money, goes bankrupt. [TMAC] The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
 See also: Expense, Banks, Funding, Expected return, Values
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