What is counterparty risk?Counterparty Risk
The risk that the other side or the platform defaults or goes bust, so the deal can't be honored.
Learn “counterparty risk” in an animated lesson
- Arbitrage StrategiesThe Costs and Risks of Arbitrage
Risk-free on paper isn't risk-free in practice. Trading costs, funding pressure and execution delays can all spoil an arbitrage.
- Arbitrage StrategiesFunding Rate Arbitrage: Risk-Free on the Surface
Buy spot and short an equal amount of perpetual futures: price moves cancel out and you just collect the funding rate. Is it really risk-free?
- CFDsWhat Is a CFD?
You don't buy the asset itself. You simply agree with the platform to settle the price difference between opening and closing.
Related terms
See how “counterparty risk” works for yourself with an animation you can drag and play.
Go to “The Costs and Risks of Arbitrage”