counterparty

counterparty
A term used to identify the "other" party in a two-party transaction. For example, the counterparty of a buyer is the seller to that buyer. The term counterparty is frequently used to identify the other party in repurchase agreement transactions and in interest rate swap transactions. American Banker Glossary
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The other participant, including intermediaries ( intermediary), in a swap or contract. Bloomberg Financial Dictionary
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The opposing side( s) of a transaction undertaken. LIFFE
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The participant with whom a trade is being transacted. London Stock Exchange Glossary

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counterparty coun‧ter‧par‧ty [ˈkaʊntəpɑːti ǁ -tərpɑːrti] noun counterparties PLURALFORM [countable] FINANCE
the person or company who you are buying from or selling to, when you buy or sell something such as a bond:

• In traditional trading, each side of the trade must assume that the counterparty will make good on its obligation.

ˌcentral ˈcounterparty FINANCE
a system used in some stockmarkets in which investors do not buy and sell to each other directly, so that there is no risk that one side will not pay what is owed:

• The central counterparty effectively stands between buyers and sellers, momentarily taking the shares onto its own books during the transaction.

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counterparty UK US /ˈkaʊntəˌpɑːti/ noun [C]
FINANCE the buyer or the seller in a financial contract: counterparty to sb »

The counterparty to the option buyer is the option writer.

See also CENTRAL COUNTERPARTY(Cf. ↑central counterparty)

Financial and business terms. 2012.

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Look at other dictionaries:

  • Counterparty — Party on the other side of a trade or transaction. The New York Times Financial Glossary * * * counterparty coun‧ter‧par‧ty [ˈkaʊntəpɑːti ǁ tərpɑːrti] noun counterparties PLURALFORM [countable] FINANCE the person or company who you are buying… …   Financial and business terms

  • Counterparty — A counterparty (sometimes contraparty) is a legal and financial term. It means a party to a contract. A counterparty is usually the entity with whom one negotiates on a given agreement, and the term can refer to either party or both, depending on …   Wikipedia

  • Counterparty — The other party that participates in a financial transaction. Every transaction must have a counterparty in order for the transaction to go through. More specifically, every buyer of an asset must be paired up with a seller that is willing to… …   Investment dictionary

  • Counterparty Risk — The risk to each party of a contract that the counterparty will not live up to its contractual obligations. Counterparty risk as a risk to both parties and should be considered when evaluating a contract. In most financial contracts, counterparty …   Investment dictionary

  • counterparty risk — The risk that a counterparty will default (fail to perform) on its obligation under a contract. Counterparty risk is not limited to credit risk (the risk that the counterparty cannot fulfill its contractual obligations) but may also result from… …   Financial and business terms

  • Counterparty credit risk —   Risk that the counterparty will fail to meet its obligations under the terms agreed of all contracts resulting in possible replacement costs. Counterparty credit risk is becoming an important factor in the derivatives markets (such as swaps).… …   International financial encyclopaedia

  • counterparty risk — The risk that either of the parties to a contract (counterparties) will fail to honour their obligations under the contract. In such organized markets as the London International Financial Futures and Options Exchange this risk is reduced by the… …   Big dictionary of business and management

  • Counterparty exposure —   Difference between the sum of assets and contingent assets and the sum of liabilities and contingent liabilities relating to the same counterparty on which a credit risk is run(provided netting is allowed). See also Risk management …   International financial encyclopaedia

  • counterparty credit risk — sandorio šalies kredito rizika statusas Aprobuotas sritis kredito ir finansų įstaigos apibrėžtis Tikimybė patirti nuostolių dėl to, kad sandorio šalis ateityje nesugebės įvykdyti sutartyje numatytų įsipareigojimų. atitikmenys: angl. counterparty… …   Lithuanian dictionary (lietuvių žodynas)

  • counterparty risk — sandorio šalies rizika statusas Aprobuotas sritis kolektyvinio investavimo subjektų veikla apibrėžtis Tikimybė, kad kolektyvinio investavimo subjektas patirs nuostolių dėl sandorio šalies nesugebėjimo iki galutinio atsiskaitymo momento įvykdyti… …   Lithuanian dictionary (lietuvių žodynas)

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