How Does a Swap-Based ETF Typically Post Collateral to Mitigate Counterparty Risk? ⎊ Path

How Does a Swap-Based ETF Typically Post Collateral to Mitigate Counterparty Risk?

The swap-based ETF requires the counterparty to post collateral, often a basket of highly liquid, high-quality assets (like government bonds or blue-chip stocks), into a segregated account. This collateral must be equal to or greater than the swap's exposure to the counterparty.

If the counterparty defaults, the ETF can seize the collateral to cover the loss.

How Can a Cryptocurrency-Focused ETF Be Structured to Track the Price of Bitcoin?

How Do Margin Requirements Mitigate Counterparty Risk in Derivatives Trading?

What Is “Liquid Staking” and How Does It Affect Token Utility?

What Is the Difference between ‘Segregated’ and ‘Omnibus’ Accounts in Custody?

What Is the Difference between a ‘Spot’ Bitcoin ETF and a ‘Futures’ Bitcoin ETF?

How Does the Custody Requirement for a Spot Bitcoin ETF Differ from a Futures ETF?

Define the Difference between an Omnibus Account and a Segregated Wallet in Custody

What Is the Purpose of the Margin Account in Futures Trading?

Glossar

ETF

Asset ⎊ An Exchange-Traded Fund (ETF) within the cryptocurrency space represents a basket of digital assets, mirroring the structure of traditional ETFs but applied to crypto holdings.