Series 14: 2.7.4. Close-Outs Of Uncompleted OTC Trades

2.7.4. Close-Outs of Uncompleted OTC Trades

One of the main advantages of securities exchanges is the reduction of counterparty risk. Counterparty risk is the risk that one party to an agreement will default on its obligations, such as the seller in a securities trade failing to deliver the securities on time, or the buyer rejecting a properly made delivery because it is unable to pay on time. In general, completing a securities trade “on time” means completi