Trading & Market Structure

Novation

Definition

What is Novation?

The replacement of an original contract party with another, often a central counterparty.

Example in practice

After clearing, the CCP becomes counterparty to both sides.

Keep learning

The highest price a buyer is currently willing to pay for a security.

The lowest price a seller is currently willing to accept for a security.

The difference between the best available buying and selling prices.

An instruction to buy or sell immediately at the best available prices.

Think you know your investing terms?

Put your knowledge to the test with a quick quiz.