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 sell and vice versa.

All trades require some sort of counterparty. For example, the counterparty to the option buyer would be the option writer. One of the risks involved in any transaction is counterparty risk, which is the risk that the counterparty will be unable to fulfill his or her duties. However, in many financial transactions the counterparty is unknown.

Investment dictionary. . 2012.

Look at other dictionaries:

  • 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… …   Financial and business terms

  • 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 — noun Date: 1980 a party to a financial transaction …   New Collegiate Dictionary

  • counterparty — noun The other party to a financial transaction …   Wiktionary

  • counterparty — n. party to a financial contract; other party in business transaction or to a financial transaction …   English contemporary dictionary

  • Counterparty —   An ISO term. The corresponding party to the transaction. [/34x] 4*35x.   Party with whom a contract has been concluded, i.e. client, broker, other branch, H.O., other bank or a department …   International financial encyclopaedia

  • counterparty — A person who is a party to a contract …   Big dictionary of business and management

  • counterparty — coun·ter·party …   English syllables

  • counterparty — / kaυntəpɑ:ti/ noun the other party in a deal …   Dictionary of banking and finance

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