How Can a Smart Contract on a Blockchain Automate the Execution of a Financial Derivative and Ensure Non-Repudiation?

A smart contract is a self-executing contract with the terms of the agreement directly written into code. For a financial derivative, the smart contract can be programmed to automatically execute certain actions, such as margin calls or settlement, when specific market conditions are met.

The execution of the smart contract is recorded on the immutable blockchain, providing a permanent and unalterable record of the event. This ensures non-repudiation, as neither party can deny the execution of the contract's terms once the conditions have been met.