The apocalyptic act of bringing your derivative relationship with your counterparty to an unscheduled conclusion.
Usually, this will only happen in a time of utter market panic. In this way the circumstances in which your trading arrangement expires could scarcely be further from the atmosphere of cool tedium which prevailed when you began it.
Each hot second will be accompanied by fear and loathing. Your defaulting counterparty will have transformed from a being a nice chap with a ready quip and emotionally intelligent chat about your kids to a shadowy stranger who won’t return your calls. When you can find him he will restrict himself to aphorisms and gnomic utterances, swearing blind his operations team have given irrevocable instructions to a new depositary — of whom, in all your happy conversations until today, there has been no mention — who is all set to pay you, in full, later in the day.
His assurances will be patently unlikely and categorically unprovable, but will still fall maddeningly, brilliantly, short of the fence which bounds the farthest reach of commercial probability. So you just won’t know if he’s shitting you. Well, you will know, but there that nagging fear will just crawl ticklishly around the back of your mind, that he isn’t and, if he isn’t, and you pull the trigger, the whole world will turn on you.
This is a time when even the sensible folk in the organisation have lost their heads and are blaming it on you, and what you need is a calm, collected and easy-to-follow guide that will help you step through the labyrinth of closing out an ISDA while your risk guy calls you every forty-five seconds.