Collateral

Revision as of 17:31, 9 November 2016 by Amwelladmin (talk | contribs)

Collateral, as a abstract concept, is securities and cash a counterparty puts up as credit risk mitigation.
A collateral contract — an even more abstract concept — is a binding agreement which supports or gives a person a right to enter into another contract. (Certain forms of option — swaptions for example — are collateral contracts.