Derivatives · glossary

Event of Default

A failure by one party, such as a missed payment, a breach of the agreement, a cross default or insolvency. Clause 5.1 lists eight. While one continues, the other party may end every trade, or none. Clause 5.1 · Chapter 8

Explained in Chapter 8, The First Winter: Events of Default, Cross Default and the Two Hats, of Derivatives.

The main page for this term is Event of Default, in Security & Collateral.

How it comes up, in Chapter 8
Clause 5.1 lists the Events of Default. Each is a failure by one party, called the Defaulting Party. While one continues, the other party may end every trade under the agreement.
Read Chapter 8, The First Winter: Events of Default, Cross Default and the Two Hats →

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