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Posts tagged with counterparty risk

Say you find a sucker and you make a bet with him. A bet that is so good for you and so bad for him that you can barely believe he signed on to it. You are smirking inside and when you’re not facing him anymore you break into gleeful, villainous laughter.

A couple months later the contract comes due. You find the sucker and he has made dumb bets all over town. He’s cleaned out and you can’t draw blood from a stone.

That’s counterparty risk.