Counterparty

counterparty risk investment & finance definition
The risk that a party to a transaction will fail to fulfill its obligations.

Counterparty
The opposite party in a bilateral agreement, contract, or transaction.

Counterparty Risks
Foreign Currency Inter-bank Exchange (FOREX) instruments are Positions (Buys and/or Sell) between the Client and its Counterparty and, unlike exchange-traded foreign exchange instruments which are, in effect, ...

Counterparty risks are understood to be the type and degree of risks associated with each party in a contractual arrangement. Essentially, the counterparty risk addresses the financial stability of each party involved.

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.

Related Links: ...

Notional amounts outstanding of OTC foreign exchange derivatives by instrument, counterparty and currency at end-June 2007
All currencies
In millions of US dollars
FOREX: ...

COUNTERPARTY: Any one of the participants in a transaction.
ENTRY ORDER: The order which enters a position at a specified level.
FOREX: Foreign Currency Exchange ...

Counterparty: One of the opposing parties involved in a transaction.

Counterparty - One of the participants in a financial transaction.
Country Risk - Risk associated with a cross-border transaction, including but not limited to legal and political conditions.

Counterparty
The participant with whom a trade is being transacted.
Coupon ...

Counterparty Risk: The risk associated with the financial stability of the party entered into contract with.

Counterparty - The other organisation or party with whom the exchange deal is being transacted.
Countervalue - Where a person buys a currency against the dollar it is the dollar value of the transaction.

Counterparty - The person or entity taking the other side of a futures trade.

Counterparty risk
The risk that the other party to an agreement will default. In an options contract, the risk to the option buyer that the option writer will not buy or sell the underlying as agreed.
Coupon ...

counterparty
One of two entities in a traditional interest rate swap. In the municipal market a counterparty and a party can be a state or local government, a broker-dealer or a corporation.
corporate bond ...

Counterparty
In any financial contract, the persons or institutions entering the contract on the opposite sides of the transaction are called the counterparties.

Counterparty
Party on the other side of a trade or transaction.
Counterparty risk
The risk that the other party to an agreement will default.

Counterparty

When a trading member enters an order, any other trading member with an order on the opposite side is referred to as the counterparty.

Counterparty risk is essentially the risk of default on an over-the-counter transaction. If two large banks enter into a trade that is not done on an exchange, this is called an over-the-counter transaction.

Counterparty risk; all settlement obligations are cleared and guaranteed by SFE Clearing Corporation (SFECC) which has a statutory obligation to operate "fair and efficient" facilities.

A counterparty in a junk bond swap receives the total rate of return on a portfolio of junk bonds and pay LIBOR.
A bank loan swap might pay the total rate of return on a risky bank loan and receive LIBOR.

The counterparty (option writer / seller) has an obligation to fulfill if the option holder exercises the option. In return, the option seller receives the option price or premium .
Option frameworks ...

The counterparty to your trade may bust it when it's too far away from the closing print. This falls under the category of an erroneous fill, and it can be contested by the wounded party.

Central Counterparty - stands between two parties to a trade to eliminate counterparty risk by ensuring that settlement takes place
CC&G ...

Risk that the counterparty is either unable or unwilling to fulfill his payment obligations.
Delivery Cut-off ...

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.

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...

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).

Fixed-rate payerIn an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a floating-rate payment.

The clearing corporation's elimination of such counterparty credit risk provides a great benefit to the futures and options markets. You may wonder how the clearing corporation does this.

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.

The counterparty is obviously going to exercise his option and buy the underlying from you at $45 (assuming the stock is currently trading above $45).

Credit risk: The amount of money you could lose as the result of a default by a counterparty. When making a loan, (or bond purchase), all the principal and accrued interest is at risk.

There are many forms of credit risk; counterparty risk affects trading operations if the counterparty fails to take delivery on a security or fails to pay at settlement of a derivatives contract.

CMS is acting as a counterparty to its clients’ transactions and as a result, CMS’s interests may be in conflict with its client’s.

Providing a welcome counterpoint to counterparty risk, meanwhile, Navios Maritime Partners' (NYSE: NMM ) own exposure to Korea Line's troubles has been effectively mitigated by insurance contracts designed to protect against just such an ...

A type of credit derivative in which one counterparty receives the total return (interest payments and any capital gains or losses) from a specified reference asset and the other counterparty receives a specified fixed or floating cash flow that is ...

Large Order Execution (LOX) Procedures: 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 ...

Delivery Risk - A term to describe when a counterparty will not be able to complete his side of the deal.

Fundamentally, the first party in the swap faces credit risk from a third party. The counterparty in this agreement insures against this risk.

An unwritten agreement or transaction backed only by the integrity of the counterparty to actually abide by the terms of the agreement.

An individual or firm that acts as a principal or counterparty to a transaction. ...
Debit
The amount that is subtracted from a trader?s account when a trade involves the net purchase of options contracts. ...

A party simultaneously buys and sells (or sells and buys) the same amount of a currency with another counterparty; ...

For Future Contract (organized market), room compensation ensures the counterparty and therefore guarantees the absence of failure of either party. At the close of each day the broker deferred account on your profit or loss item.

Liability
In terms of foreign exchange , the obligation to deliver to a counterparty an amount of currency either in respect of a balance sheet holding at a specified future date or in respect of an un-matured forward or spot transaction.

Credit Risk - The idea that an outstanding currency position will not be repaid as agreed by the counterparty, either voluntarily or not. Also known as counterparty risk.

Maximum credit exposure - Also called worst-case credit exposure, this is a statistical risk measure which quantifies the potential credit exposure of a party to a specific counterparty at a specified time in the future, ...

To check the availability of a credit line for the counterparty prior to the conclusion of a deal.
Choice:
Seller and Buyer at the same price.

Principal Transaction A transaction in which the counterparty is purchasing or selling an asset on their own behalf.

The ASX Group's activities span primary and secondary market services, including capital formation and hedging, trading and price discovery (Australian Securities Exchange); central counterparty risk transfer (ASX Clearing Corporation); ...

An individual or a firm that buys and sells assets from their own portfolio, acting as a principal or counterparty to a transaction.
Delivery Date ...

Calls for both counterparties to post a "good faith bond" that is held in escrow by a reputable and disinterested third party. Futures exchanges require each counterparty to post a bond in the form of a margin requirement.
Gain ...

This comes into play in all trades between Bourse member firms. By eliminating counterparty risk, it cuts short the chain reaction a fail would otherwise trigger and has reduced uncleared trades in Paris to virtually nil.

In its standard (generic) form, one party to the swap agrees to pay a fixed interest rate in exchange for receiving a variable (floating) rate on the swap's notional amount. The reverse position is taken by the counterparty.

Oftentimes reeks of financial statement manipulation, off-balance sheet activities, or used to hide debt. A subsidiary corporation designed to serve as a counterparty for swaps and other credit sensitive derivative instruments.

Floor : (1) An agreement with a counterparty that sets a lower limit to i...
Floor brokers : Any individuals on the exchange floor engaged in executin...
Floor traders : See Floor traders locals.

If you are trading commodity futures and wish to make delivery of the commodity you will want the clearing house to cover counterparty risk. That means if the buyer will not or cannot pay for your commodity the exchange will pay.

00 on one of the worlds top rated forex trading platforms.
TradeStation Securities
GAIN Capital Group, LLC acts as the counterparty for each forex transaction and as a liquidity provider to clients using its access to the inter-bank market.
UFXBank ...

[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: Market, Trading, Exchange, Future, Risk