Collateral risks in Derivatives contracts Sandra Ileigo Ogbonna

On one level in derivatives contracts, we have parties typically wanting to manage their risks as a result of a prior transaction.


On another level, parties become exposed to the risk of transacting with one another while trying to manage their previous risk.

(I know, its interesting!).

Now they also have to manage their exposure to one another.


This is done by their collateral arrangements which involves constant valuation of the collateral and reviewing the collateral to meet the exposure posed.


I discuss the above and a little more in this podcast. I shed a little light on the collateral acceptable in Nigeria’s OTC FX Futures market too.

I hope you find the knowledge shared valuable.