Trading & Market Structure

Central Counterparty

Definition

What is Central Counterparty?

An entity that becomes the buyer to every seller and seller to every buyer for cleared trades.

Example in practice

The clearing house reduces direct counterparty exposure between traders.

Keep learning

The highest price a buyer is currently willing to pay for a security.

The lowest price a seller is currently willing to accept for a security.

The difference between the best available buying and selling prices.

An instruction to buy or sell immediately at the best available prices.

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