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• Security, cash or something of value, deposited by the party owing money to the party to whom money is owed, to help assure that payables will be paid when due. The collateral is called for when the pre-established credit limit has been reached. In commodity markets, such payables arise from every physical or financial transaction where cash is paid upfront. Margin at a futures exchange is one form of collateral.

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  Cite Definition for Collateral

  American Psychological Association (APA)

  Collateral. (n.d.). Guide to Market Oversight Glossary. Retrieved February 1, 2023, from website: http://www.expertglossary.com/definition/collateral.

  Chicago Manual of Style (CMS)

  Collateral. www.ferc.gov. Guide to Market Oversight Glossary. FERC. http://www.expertglossary.com/definition/collateral (accessed: February 1, 2023).

  Modern Language Association (MLA)

  "Collateral." Guide to Market Oversight Glossary. FERC. 1 February. 2023 http://www.expertglossary.com/definition/collateral.

• Browse Related Terms: Collateral, Credit, Credit risk, Financial markets, Financial transaction, Financially settled, IntercontinentalExchange (ICE), Margin requirement, Open outcry, Price discovery, Risk Management

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