Monday, June 20, 2005

The reporting triangle 

Crossing and Netting 

Two terms that define related but separate ideas.

Netting is when you trade buy 20, sell 15 with the same counterparty, and so only pay for and deliver 5.

Crossing is taking two orders from different counterparties and just executing the difference. The problems are when the two net to zero, and what the market regulations happen to be for the market on which they are traded.

This page is powered by Blogger. Isn't yours?