# What Is the Role of the ISDA Master Agreement in Preventing the Cherry-Picking of Trades? ▴ Question

**Published:** 2025-08-03
**Categories:** Question

---

![Abstract geometric forms portray a dark circular digital asset derivative or liquidity pool on a light plane. Sharp lines and a teal surface with a triangular shadow symbolize market microstructure, RFQ protocol execution, and algorithmic trading precision for institutional grade block trades and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-block-execution-microstructure.jpg)

![Internal, precise metallic and transparent components are illuminated by a teal glow. This visual metaphor represents the sophisticated market microstructure and high-fidelity execution of RFQ protocols for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-microstructure-prime-os-intelligence-layer-atomic-settlement-precision.jpg)

## Concept

The architecture of modern financial markets rests upon a series of meticulously engineered protocols designed to contain and manage systemic risk. Within the over-the-counter derivatives space, the International [Swaps and Derivatives](https://prime.greeks.live/area/swaps-and-derivatives/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Association (ISDA) [Master Agreement](https://prime.greeks.live/question/what-are-the-key-differences-between-a-prime-brokerage-agreement-and-an-isda-master-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) functions as the foundational operating system for bilateral relationships. Its primary role in the context of a counterparty default is to impose a predictable, legally robust order upon a potentially chaotic event. The agreement achieves this by systematically neutralizing one of the most significant threats in a bankruptcy scenario ▴ the selective enforcement of contracts by an insolvency administrator, a practice known as cherry-picking.

When a financial entity becomes insolvent, its appointed liquidator or trustee has a fiduciary duty to maximize the value of the estate for the benefit of all creditors. From the liquidator’s perspective, a portfolio of derivatives contracts with a solvent counterparty presents a collection of distinct assets and liabilities. Some contracts will be “in-the-money,” representing a claim the insolvent estate has against the [solvent party](https://prime.greeks.live/question/in-what-ways-does-the-default-waterfall-of-a-central-counterparty-affect-a-solvent-clearing-member/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). Others will be “out-of-the-money,” representing a liability the estate owes.

The logical, value-maximizing action for the liquidator would be to affirm the in-the-money contracts, demanding full payment, while simultaneously disclaiming the out-of-the-money contracts, forcing the solvent party to line up as a general unsecured creditor for its claims. This selective process is the essence of [cherry-picking](https://prime.greeks.live/area/cherry-picking/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). It fundamentally alters the economic reality of the trading relationship, which was always predicated on the net value of the entire portfolio of trades.

> The ISDA Master Agreement structurally prevents the disaggregation of a portfolio of trades during insolvency proceedings.

The core mechanism the [ISDA Master Agreement](https://prime.greeks.live/area/isda-master-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) deploys to prevent this outcome is the “[Single Agreement](https://prime.greeks.live/area/single-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” clause, located in Section 1(c) of the standard document. This provision is the cornerstone of the agreement’s architecture. It contractually stipulates that the Master Agreement itself, along with all subsequent transactions entered into under it, collectively form a single, indivisible contract. This legal re-characterization is profound.

It transforms a series of what might otherwise be viewed as hundreds or thousands of separate agreements into one unified legal obligation. The individual transactions lose their separateness upon a termination event and become mere components of a single, overarching financial arrangement.

This “Single Agreement” structure presents the insolvency official with a stark, binary choice. The official must either affirm the entire contract ▴ accepting both the profitable and unprofitable transactions for the estate ▴ or reject the entire contract. There is no legal basis within the agreement for the liquidator to selectively enforce parts of it. The portfolio of trades is a monolithic entity.

By forcing this all-or-nothing decision, the ISDA Master Agreement effectively short-circuits the cherry-picking incentive, preserving the original economic bargain between the two parties and ensuring that the net exposure of the portfolio is what governs the final settlement. This structural integrity is what allows the derivatives market to function with a degree of stability and predictability, even in the face of counterparty failure.

![Angular metallic structures precisely intersect translucent teal planes against a dark backdrop. This embodies an institutional-grade Digital Asset Derivatives platform's market microstructure, signifying high-fidelity execution via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-high-fidelity-execution-system-architecture.jpg)

![A complex core mechanism with two structured arms illustrates a Principal Crypto Derivatives OS executing RFQ protocols. This system enables price discovery and high-fidelity execution for institutional digital asset derivatives block trades, optimizing market microstructure and capital efficiency via private quotations](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-digital-asset-derivatives-rfq-execution-protocol-system.jpg)

## Strategy

The strategic framework of the ISDA Master Agreement is engineered around three integrated pillars of risk mitigation, which work in concert to protect a [non-defaulting party](https://prime.greeks.live/area/non-defaulting-party/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and maintain systemic stability. The Single Agreement concept is the foundation, but its strategic power is actualized through the operational protocols of [close-out netting](https://prime.greeks.live/area/close-out-netting/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and the condition precedent. Understanding how these pillars interact reveals the agreement’s sophisticated design for managing credit risk.

![Robust metallic structures, one blue-tinted, one teal, intersect, covered in granular water droplets. This depicts a principal's institutional RFQ framework facilitating multi-leg spread execution, aggregating deep liquidity pools for optimal price discovery and high-fidelity atomic settlement of digital asset derivatives for enhanced capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-optimized-for-high-fidelity-execution.jpg)

## The Three Pillars of Risk Mitigation

The ISDA architecture is a comprehensive system for risk management. Each component plays a distinct but interconnected role in the period following a counterparty default.

- **The [Single Agreement Clause](https://prime.greeks.live/area/single-agreement-clause/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)** ▴ As established, this is the legal foundation. It contractually fuses all transactions into one agreement, making the entire portfolio the unit of analysis during insolvency. This is the legal predicate for all other protective measures.

- **Close-Out Netting** ▴ This is the primary process enabled by the Single Agreement clause. Upon a defined [Event of Default](https://prime.greeks.live/area/event-of-default/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (such as bankruptcy), the non-defaulting party is granted the right to terminate all outstanding transactions under the agreement. The values of these terminated transactions are then calculated ▴ some positive, some negative ▴ and aggregated into a single net sum. This process, known as close-out netting, determines the final amount owed by one party to the other. It replaces a complex web of gross obligations with a single, net payment, drastically reducing the total credit exposure.

- **The Condition Precedent** ▴ Found in Section 2(a)(iii), this clause provides a critical, immediate defense. It establishes that a party’s obligation to make a payment or delivery is conditional upon the absence of any Event of Default with respect to the other party. If a counterparty enters bankruptcy, this provision allows the non-defaulting party to suspend its own payments, preventing any further value from flowing to the defaulting entity while the close-out netting process is organized. This protects the non-defaulting party from having to pay on out-of-the-money trades while simultaneously being unable to collect on in-the-money ones.

![Two reflective, disc-like structures, one tilted, one flat, symbolize the Market Microstructure of Digital Asset Derivatives. This metaphor encapsulates RFQ Protocols and High-Fidelity Execution within a Liquidity Pool for Price Discovery, vital for a Principal's Operational Framework ensuring Atomic Settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-liquidity-aggregation-optimizing-market-microstructure-principal-trading-best-execution-atomic-settlement.jpg)

## How Does the Agreement Alter Insolvency Outcomes?

The strategic impact of the ISDA framework becomes clear when comparing insolvency scenarios with and without the agreement in place. The presence of the agreement fundamentally shifts the balance of power and the final economic result away from a chaotic, piecemeal liquidation toward an orderly, predictable settlement.

### Table 1 ▴ Insolvency Scenario Comparison

| Scenario Element | Without ISDA Master Agreement | With ISDA Master Agreement |
| --- | --- | --- |
| Legal Status of Trades | Each transaction is a separate contract. | All transactions constitute a single, indivisible agreement. |
| Insolvency Administrator’s Action | “Cherry-picks” trades. Affirms contracts that are assets to the estate (e.g. +$15M) and rejects those that are liabilities (e.g. -$12M). | Must accept or reject the entire portfolio of trades as a whole. |
| Immediate Financial Impact | Solvent party must pay the full $15M to the estate immediately. | Close-out netting is triggered. All trades are terminated and valued. |
| Solvent Party’s Claim | Must file a claim for $12M as a general unsecured creditor in the bankruptcy, likely recovering only a fraction of the value. | The net value of all trades is calculated. In this case, a single net amount of $3M ($15M – $12M) is owed to the solvent party. |
| Final Net Exposure | The solvent party suffers a significant loss, paying out $15M and receiving little to nothing back on its $12M claim. | The solvent party has a single claim for the net amount of $3M, accurately reflecting the portfolio’s true economic value. |

> The ISDA Master Agreement transforms a portfolio’s gross exposure into a single net obligation, thereby preserving the economic bargain.

![A sleek, institutional-grade system processes a dynamic stream of market microstructure data, projecting a high-fidelity execution pathway for digital asset derivatives. This represents a private quotation RFQ protocol, optimizing price discovery and capital efficiency through an intelligence layer](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-digital-asset-derivatives-execution-microstructure-prime-os.jpg)

## The Close out Netting Process

The close-out netting mechanism is the procedural heart of the ISDA strategy. It is a structured, three-step process designed to arrive at a definitive, final settlement figure efficiently.

- **Termination** ▴ The non-defaulting party designates an [Early Termination](https://prime.greeks.live/area/early-termination/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Date for all transactions under the agreement. This crystallizes all future payment obligations.

- **Valuation** ▴ All terminated transactions are valued to determine their replacement cost at the time of termination. This involves calculating the mark-to-market value of each trade, resulting in a mix of positive and negative values from the perspective of the non-defaulting party.

- **Determination of Net Balance** ▴ The positive and negative values are aggregated. Any amounts that were due but unpaid prior to termination are also included. The final calculation produces a [single net amount](https://prime.greeks.live/area/single-net-amount/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), known as the [Early Termination Amount](https://prime.greeks.live/area/early-termination-amount/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), which is payable by one party to the other.

This strategic framework does more than just prevent cherry-picking. By reducing gross credit exposures to a single net figure, it significantly lowers the [systemic risk](https://prime.greeks.live/area/systemic-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) in the financial system. Financial institutions can measure their [counterparty risk](https://prime.greeks.live/area/counterparty-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) on a net basis, which leads to a more efficient allocation of regulatory capital and enhances market liquidity.

![A teal-blue textured sphere, signifying a unique RFQ inquiry or private quotation, precisely mounts on a metallic, institutional-grade base. Integrated into a Prime RFQ framework, it illustrates high-fidelity execution and atomic settlement for digital asset derivatives within market microstructure, ensuring capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-prime-os-execution-1.jpg)

![Reflective and circuit-patterned metallic discs symbolize the Prime RFQ powering institutional digital asset derivatives. This depicts deep market microstructure enabling high-fidelity execution through RFQ protocols, precise price discovery, and robust algorithmic trading within aggregated liquidity pools](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-architecture-driving-institutional-digital-asset-derivatives-rfq-protocols-for-optimal-liquidity-and-best-execution.jpg)

## Execution

The execution of the anti-cherry-picking provisions within the ISDA Master Agreement is a precise, protocol-driven process. It moves from legal theory to operational reality through specific clauses that govern default, termination, and valuation. For market participants, understanding these execution mechanics is essential for appreciating the agreement’s robustness and for ensuring its protections are correctly invoked in a credit event.

![A fractured, polished disc with a central, sharp conical element symbolizes fragmented digital asset liquidity. This Principal RFQ engine ensures high-fidelity execution, precise price discovery, and atomic settlement within complex market microstructure, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-unifying-fragmented-digital-asset-derivatives-liquidity-for-best-execution.jpg)

## Triggering the Close out Protocol

The process begins with the occurrence of a contractually defined “Event of Default.” Section 5(a) of the ISDA Master Agreement lists several such events, with bankruptcy being one of the most critical. The filing of a bankruptcy petition by or against a counterparty typically constitutes an Event of Default, granting the non-defaulting party the right to initiate the close-out procedure. This right is exercised by the non-defaulting party delivering a notice to the defaulting party, specifying the Event of Default and designating an Early Termination Date. In some cases, particularly for insolvency events, the agreement can be structured for Automatic Early Termination, where termination occurs immediately upon the event without the need for a notice.

![Precision-engineered metallic discs, interconnected by a central spindle, against a deep void, symbolize the core architecture of an Institutional Digital Asset Derivatives RFQ protocol. This setup facilitates private quotation, robust portfolio margin, and high-fidelity execution, optimizing market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-infrastructure.jpg)

## The Quantitative Mechanics of Valuation

Once termination is triggered, the core of the execution phase is the valuation of all terminated transactions. The goal is to determine a single figure ▴ the Early Termination Amount ▴ that represents the net value of the entire portfolio. The 2002 ISDA Master Agreement provides a single valuation method called “Close-out Amount.” This requires the determining party (usually the non-defaulting party) to calculate, in good faith and using commercially reasonable procedures, the losses or costs associated with replacing the terminated transactions. This includes the cost of entering into equivalent replacement trades in the market.

The calculation is a granular, trade-by-trade process that culminates in a single net figure. The table below provides a simplified illustration of this calculation.

### Table 2 ▴ Hypothetical Early Termination Amount Calculation

| Transaction ID | Transaction Type | Mark-to-Market (MTM) Value | Status (from Non-Defaulting Party’s View) |
| --- | --- | --- | --- |
| IRS-001 | Interest Rate Swap | +$10,500,000 | In-the-Money (Asset) |
| FXS-045 | Currency Swap | -$7,200,000 | Out-of-the-Money (Liability) |
| IRS-008 | Interest Rate Swap | +$3,400,000 | In-the-Money (Asset) |
| CDS-112 | Credit Default Swap | -$1,850,000 | Out-of-the-Money (Liability) |
| FXO-210 | FX Option | +$950,000 | In-the-Money (Asset) |
| Subtotal MTM | | +$5,800,000 | |
| Unpaid Amounts Owed to Non-Defaulting Party | | +$350,000 | |
| Unpaid Amounts Owed to Defaulting Party | | -$150,000 | |
| Early Termination Amount | | +$6,000,000 | Payable by Defaulting Party |

In this execution, the individual positive and negative values of each transaction are netted against each other. After accounting for any previously unpaid amounts, a final net sum of $6,000,000 is calculated. This single figure is the only claim the non-defaulting party has against the insolvent estate, or the only amount it owes. The individual values of the component trades are no longer relevant; they have been subsumed into the single net amount through the execution of the close-out protocol.

![A precision metallic dial on a multi-layered interface embodies an institutional RFQ engine. The translucent panel suggests an intelligence layer for real-time price discovery and high-fidelity execution of digital asset derivatives, optimizing capital efficiency for block trades within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-high-fidelity-execution-system.jpg)

## What Is the Role of Legal Enforceability in Execution?

The entire mechanical process of close-out netting depends on a final, critical element of execution ▴ its legal enforceability in the jurisdiction of the insolvent counterparty. The contractual provisions of the ISDA Master Agreement are powerful, but they must hold up in a court of law during bankruptcy proceedings, which are governed by local statutes that can override private contracts.

Recognizing this, ISDA has invested heavily in obtaining legal opinions from law firms in dozens of countries. These “[Netting Opinions](https://prime.greeks.live/area/netting-opinions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” confirm that the close-out netting and single agreement provisions of the ISDA Master Agreement are effective and enforceable under the local laws of that jurisdiction. For prudentially regulated financial institutions, the ability to rely on these opinions is a prerequisite for recognizing the risk-reducing benefits of netting in their regulatory capital calculations. This global effort to ensure legal certainty is a continuous and vital part of the execution framework that makes the ISDA Master Agreement a successful and reliable tool for preventing cherry-picking and managing counterparty credit risk on a global scale.

![A sleek, multi-component mechanism features a light upper segment meeting a darker, textured lower part. A diagonal bar pivots on a circular sensor, signifying High-Fidelity Execution and Price Discovery via RFQ Protocols for Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-institutional-digital-asset-derivatives-rfq-execution-microstructure-for-optimal-price-discovery-and-atomic-settlement-with-prime-os-integration.jpg)

## References

- International Swaps and Derivatives Association. “The Importance of Close-Out Netting.” ISDA Research Notes, no. 1, 2010.

- International Swaps and Derivatives Association. “General features of the ISDA Master Agreement.” Presentation, 16 Feb. 2010.

- French, Thomas H. and Jack I. Habert. “The Lehman Bankruptcy and Swap Lessons Learned Negotiating an ISDA Master Agreement in Today’s Market.” Hedge Fund Law Report, 2009.

- Johnson, Erik F. “The Lehman Brothers Bankruptcy F ▴ Introduction to the ISDA Master Agreement.” Yale School of Management Case Study, 2015.

- Wood, Philip R. “On Close-Out Netting.” In Transnational Securities Law, edited by Thomas Keijser, Oxford University Press, 2014.

- Mengle, David. “The Importance of Close-Out Netting.” International Swaps and Derivatives Association, 2010.

- ISDA. “Enforceability of close-out netting is the single most important legal requirement for safe and efficient derivatives markets.” White Paper, 2020.

- MidhaFin. “Netting, Close-Out And Related Aspects.” MidhaFin Research, 2025.

![A dark, precision-engineered core system, with metallic rings and an active segment, represents a Prime RFQ for institutional digital asset derivatives. Its transparent, faceted shaft symbolizes high-fidelity RFQ protocol execution, real-time price discovery, and atomic settlement, ensuring capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-core-for-high-fidelity-rfq-protocol-execution-and-atomic-settlement.jpg)

## Reflection

The ISDA Master Agreement provides a powerful lesson in system design. It demonstrates how a carefully constructed legal architecture can impose order, predictability, and stability on the inherently uncertain event of a counterparty’s financial collapse. The principles embedded within its framework ▴ the unification of disparate elements into a single entity, the establishment of clear protocols for crisis events, and the validation of those protocols against external legal systems ▴ are not confined to derivatives law. They offer a blueprint for thinking about risk management in any complex system.

As you evaluate your own operational frameworks, consider where hidden risks lie in the assumed separateness of its components. Reflect on how a more integrated, systemic approach to your own protocols could provide a more robust defense against unexpected failures.

![A central toroidal structure and intricate core are bisected by two blades: one algorithmic with circuits, the other solid. This symbolizes an institutional digital asset derivatives platform, leveraging RFQ protocols for high-fidelity execution and price discovery](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-hub-integrating-algorithmic-intelligence-for-high-fidelity-price-discovery-and-liquidity-aggregation.jpg)

## Glossary

<a href="https://prime.greeks.live/area/swaps-and-derivatives/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![This visual represents an advanced Principal's operational framework for institutional digital asset derivatives. A foundational liquidity pool seamlessly integrates dark pool capabilities for block trades](https://options.greeks.live/wp-content/uploads/2025/07/principal-crypto-derivatives-os-rfq-execution-microstructure.jpg)

## Swaps and Derivatives

Meaning ▴ Swaps and derivatives, within the sophisticated crypto financial landscape, are contractual instruments whose value is derived from the price performance of an underlying cryptocurrency asset, index, or rate. </a><a href="https://prime.greeks.live/question/what-are-the-key-differences-between-a-prime-brokerage-agreement-and-an-isda-master-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sharp, layered planes, one deep blue, one light, intersect a luminous sphere and a vast, curved teal surface. This abstractly represents high-fidelity algorithmic trading and multi-leg spread execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-system-microstructure.jpg)

## Master Agreement

A Prime Brokerage Agreement is a centralized service contract; an ISDA Master Agreement is a standardized bilateral derivatives protocol. </a><a href="https://prime.greeks.live/question/in-what-ways-does-the-default-waterfall-of-a-central-counterparty-affect-a-solvent-clearing-member/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered metallic cross-structure, embodying an RFQ engine's market microstructure, showcases diverse elements. One granular arm signifies aggregated liquidity pools and latent liquidity](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-engine-microstructure-for-atomic-settlement.jpg)

## Solvent Party

A CCP's default waterfall subjects a solvent member to mutualized losses and contingent liquidity calls, transforming a peer's failure into a direct capital risk. </a><a href="https://prime.greeks.live/area/cherry-picking/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated metallic mechanism with integrated translucent teal pathways on a dark background. This abstract visualizes the intricate market microstructure of an institutional digital asset derivatives platform, specifically the RFQ engine facilitating private quotation and block trade execution](https://options.greeks.live/wp-content/uploads/2025/07/systemic-framework-for-institutional-digital-asset-derivatives-rfq-price-discovery-and-atomic-settlement.jpg)

## Cherry-Picking

Meaning ▴ Cherry-picking, within crypto trading, refers to the practice of selectively executing only the most advantageous trades from a pool of available opportunities, often leaving less favorable transactions for other market participants. </a><a href="https://prime.greeks.live/area/isda-master-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek Execution Management System diagonally spans segmented Market Microstructure, representing Prime RFQ for Institutional Grade Digital Asset Derivatives. It rests on two distinct Liquidity Pools, one facilitating RFQ Block Trade Price Discovery, the other a Dark Pool for Private Quotation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-execution-optimizing-rfq-protocols-across-segmented-liquidity-pools.jpg)

## Isda Master Agreement

Meaning ▴ The ISDA Master Agreement, while originating in traditional finance, serves as a crucial foundational legal framework for institutional participants engaging in over-the-counter (OTC) crypto derivatives trading and complex RFQ crypto transactions. </a><a href="https://prime.greeks.live/area/single-agreement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central processing core with intersecting, transparent structures revealing intricate internal components and blue data flows. This symbolizes an institutional digital asset derivatives platform's Prime RFQ, orchestrating high-fidelity execution, managing aggregated RFQ inquiries, and ensuring atomic settlement within dynamic market microstructure, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-trading-system-facilitating-high-fidelity-rfq-protocol-optimization-for-best-execution-and-atomic-settlement.jpg)

## Single Agreement

Meaning ▴ A Single Agreement is a master legal contract that consolidates multiple transactions and the overall relationship between two parties into one comprehensive document. </a><a href="https://prime.greeks.live/area/non-defaulting-party/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision digital token, subtly green with a '0' marker, meticulously engages a sleek, white institutional-grade platform. This symbolizes secure RFQ protocol initiation for high-fidelity execution of complex multi-leg spread strategies, optimizing portfolio margin and capital efficiency within a Principal's Crypto Derivatives OS](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-platform-secure-rfq-protocol-initiation-for-optimal-block-trade-execution.jpg)

## Non-Defaulting Party

Meaning ▴ A Non-Defaulting Party refers to the participant in a financial contract, such as a derivatives agreement or lending facility within the crypto ecosystem, that has fully adhered to its obligations while the other party has failed to do so. </a><a href="https://prime.greeks.live/area/close-out-netting/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A diagonal metallic framework supports two dark circular elements with blue rims, connected by a central oval interface. This represents an institutional-grade RFQ protocol for digital asset derivatives, facilitating block trade execution, high-fidelity execution, dark liquidity, and atomic settlement on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/optimized-institutional-digital-asset-derivatives-trading-system-rfq-protocols-and-atomic-settlement.jpg)

## Close-Out Netting

Meaning ▴ Close-out netting is a legally enforceable contractual provision that, upon the occurrence of a default event by one counterparty, immediately terminates all outstanding transactions between the parties and converts all reciprocal obligations into a single, net payment or receipt. </a><a href="https://prime.greeks.live/area/single-agreement-clause/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, angular Prime RFQ interface component featuring a vibrant teal sphere, symbolizing a precise control point for institutional digital asset derivatives. This represents high-fidelity execution and atomic settlement within advanced RFQ protocols, optimizing price discovery and liquidity across complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-control-point.jpg)

## Single Agreement Clause

Meaning ▴ A Single Agreement Clause is a legal provision within a master agreement stipulating that all individual transactions executed between two parties under that agreement constitute one unitary, overarching contract. </a><a href="https://prime.greeks.live/area/event-of-default/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Diagonal composition of sleek metallic infrastructure with a bright green data stream alongside a multi-toned teal geometric block. This visualizes High-Fidelity Execution for Digital Asset Derivatives, facilitating RFQ Price Discovery within deep Liquidity Pools, critical for institutional Block Trades and Multi-Leg Spreads on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-digital-asset-derivatives-rfq-execution-optimization-leveraging-proprietary-institutional-prime-os-for-optimal-price-discovery-and-latency-reduction.jpg)

## Event of Default

Meaning ▴ An Event of Default, in the context of crypto financial agreements and institutional trading, signifies a predefined breach of contractual obligations by a counterparty, triggering specific legal and operational consequences outlined in the governing agreement. </a><a href="https://prime.greeks.live/area/early-termination/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An abstract view reveals the internal complexity of an institutional-grade Prime RFQ system. Glowing green and teal circuitry beneath a lifted component symbolizes the Intelligence Layer powering high-fidelity execution for RFQ protocols and digital asset derivatives, ensuring low latency atomic settlement](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-prime-os-core-engine-for-rfq-protocol-execution.jpg)

## Early Termination

Meaning ▴ Early Termination, within the framework of crypto financial instruments, denotes the contractual right or obligation to conclude a derivative or lending agreement prior to its originally stipulated maturity date. </a><a href="https://prime.greeks.live/area/early-termination-amount/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A gleaming, translucent sphere with intricate internal mechanisms, flanked by precision metallic probes, symbolizes a sophisticated Principal's RFQ engine. This represents the atomic settlement of multi-leg spread strategies, enabling high-fidelity execution and robust price discovery within institutional digital asset derivatives markets, minimizing latency and slippage for optimal alpha generation and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/inst-digital-asset-deriv-rfq-os-for-optimal-high-fidelity-trade-exec.jpg)

## Early Termination Amount

Meaning ▴ Early Termination Amount refers to the calculated value payable by one party to another upon the premature cessation of a financial contract, such as a crypto derivative or lending agreement. </a><a href="https://prime.greeks.live/area/single-net-amount/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A metallic, disc-centric interface, likely a Crypto Derivatives OS, signifies high-fidelity execution for institutional-grade digital asset derivatives. Its grid implies algorithmic trading and price discovery](https://options.greeks.live/wp-content/uploads/2025/07/rfq-block-price-algo-fidelity-alpha-capital-institutional-digital.jpg)

## Single Net Amount

Meaning ▴ Single Net Amount refers to the consolidated monetary value of all obligations or positions between two counterparties, where various individual transactions are offset against each other to yield one single, aggregate sum. </a><a href="https://prime.greeks.live/area/counterparty-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![The image displays a sleek, intersecting mechanism atop a foundational blue sphere. It represents the intricate market microstructure of institutional digital asset derivatives trading, facilitating RFQ protocols for block trades](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-rfq-execution.jpg)

## Counterparty Risk

Meaning ▴ Counterparty risk, within the domain of crypto investing and institutional options trading, represents the potential for financial loss arising from a counterparty's failure to fulfill its contractual obligations. </a><a href="https://prime.greeks.live/area/systemic-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished sphere with metallic rings on a reflective dark surface embodies a complex Digital Asset Derivative or Multi-Leg Spread. Layered dark discs behind signify underlying Volatility Surface data and Dark Pool liquidity, representing High-Fidelity Execution and Portfolio Margin capabilities within an Institutional Grade Prime Brokerage framework](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-block-trade-liquidity-execution-microstructure-analytics.jpg)

## Systemic Risk

Meaning ▴ Systemic Risk, within the evolving cryptocurrency ecosystem, signifies the inherent potential for the failure or distress of a single interconnected entity, protocol, or market infrastructure to trigger a cascading, widespread collapse across the entire digital asset market or a significant segment thereof. </a><a href="https://prime.greeks.live/area/netting-opinions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sleek, intersecting metallic elements above illuminated tracks frame a central oval block. This visualizes institutional digital asset derivatives trading, depicting RFQ protocols for high-fidelity execution, liquidity aggregation, and price discovery within market microstructure, ensuring best execution on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-system-for-optimal-execution.jpg)

## Netting Opinions

Meaning ▴ Netting Opinions are formal legal assessments that affirm the enforceability of bilateral or multilateral netting agreements between counterparties, particularly in the event of insolvency or default. </a>

**Tags:** [Event of Default](https://options.greeks.live/area/event-of-default/), [Single Agreement](https://options.greeks.live/area/single-agreement/), [ISDA Master Agreement](https://options.greeks.live/area/isda-master-agreement/), [Systemic Risk](https://options.greeks.live/area/systemic-risk/), [Insolvency Proceedings](https://options.greeks.live/area/insolvency-proceedings/), [Counterparty Risk](https://options.greeks.live/area/counterparty-risk/)	

## Discover More

- 
### [In the Event of a Counterparty Default, What Is the Protocol for Loss Allocation in a Non-Cleared Bilateral Trade?](https://options.greeks.live/question/in-the-event-of-a-counterparty-default-what-is-the-protocol-for-loss-allocation-in-a-non-cleared-bilateral-trade/)
![A sophisticated metallic mechanism with integrated translucent teal pathways on a dark background. This abstract visualizes the intricate market microstructure of an institutional digital asset derivatives platform, specifically the RFQ engine facilitating private quotation and block trade execution. It underscores high-fidelity execution and atomic settlement within a secure Prime RFQ, revealing latent liquidity and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/systemic-framework-for-institutional-digital-asset-derivatives-rfq-price-discovery-and-atomic-settlement.jpg)

Counterparty default in bilateral trades triggers a contractual risk-containment protocol executed via the ISDA Master Agreement's close-out netting mechanism.

- 
### [Are There Jurisdictions Where the Enforceability of Close-Out Netting Is Still Uncertain?](https://options.greeks.live/question/are-there-jurisdictions-where-the-enforceability-of-close-out-netting-is-still-uncertain/)
![Precision metallic pointers converge on a central blue mechanism. This symbolizes Market Microstructure of Institutional Grade Digital Asset Derivatives, depicting High-Fidelity Execution and Price Discovery via RFQ protocols, ensuring Capital Efficiency and Atomic Settlement for Multi-Leg Spreads.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-for-precision-execution.jpg)

The enforceability of close-out netting varies by jurisdiction, making a deep analysis of local insolvency laws a critical risk parameter.

- 
### [How Does the ISDA Master Agreement Attempt to Mitigate Cherry Picking Risk?](https://options.greeks.live/question/how-does-the-isda-master-agreement-attempt-to-mitigate-cherry-picking-risk/)
![Translucent, overlapping geometric shapes symbolize dynamic liquidity aggregation within an institutional grade RFQ protocol. Central elements represent the execution management system's focal point for precise price discovery and atomic settlement of multi-leg spread digital asset derivatives, revealing complex market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-driving-optimal-liquidity-aggregation-for-precise-price-discovery-and-atomic-settlement.jpg)

The ISDA Master Agreement treats all transactions as one indivisible contract, enabling a net settlement that contractually defeats cherry-picking.

- 
### [What Constitutes a Commercially Reasonable Procedure When Calculating a Derivatives Close-Out Amount?](https://options.greeks.live/question/what-constitutes-a-commercially-reasonable-procedure-when-calculating-a-derivatives-close-out-amount/)
![Sleek, modular system component in beige and dark blue, featuring precise ports and a vibrant teal indicator. This embodies Prime RFQ architecture enabling high-fidelity execution of digital asset derivatives through bilateral RFQ protocols, ensuring low-latency interconnects, private quotation, institutional-grade liquidity, and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-system-interface-for-digital-asset-derivatives-execution.jpg)

A defensible derivatives close-out is a systemized, evidence-based procedure for calculating replacement cost in good faith.

- 
### [Why Was the “First Method” or One-Way Payment System Removed in the 2002 ISDA Master Agreement?](https://options.greeks.live/question/why-was-the-first-method-or-one-way-payment-system-removed-in-the-2002-isda-master-agreement/)
![A central toroidal structure and intricate core are bisected by two blades: one algorithmic with circuits, the other solid. This symbolizes an institutional digital asset derivatives platform, leveraging RFQ protocols for high-fidelity execution and price discovery. It optimizes market microstructure for capital efficiency, managing multi-leg spreads and latent liquidity within a Principal's operational framework.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-hub-integrating-algorithmic-intelligence-for-high-fidelity-price-discovery-and-liquidity-aggregation.jpg)

The First Method was removed to enforce equitable two-way payments, align with regulatory capital rules, and enhance overall market stability.

- 
### [How Do ISDA Agreements Mitigate Systemic Risk in Financial Markets?](https://options.greeks.live/question/how-do-isda-agreements-mitigate-systemic-risk-in-financial-markets/)
![A stacked, multi-colored modular system representing an institutional digital asset derivatives platform. The top unit facilitates RFQ protocol initiation and dynamic price discovery. Central modules signify the core execution engine and aggregated liquidity. The base unit manages atomic settlement, optimizing capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-15.jpg)

ISDA Agreements provide a standardized legal and operational protocol for netting exposures and managing collateral, containing defaults.

- 
### [How Does Close-Out Netting Differ from Payment Netting under the ISDA Agreement?](https://options.greeks.live/question/how-does-close-out-netting-differ-from-payment-netting-under-the-isda-agreement-2/)
![A sleek, futuristic institutional-grade instrument, representing high-fidelity execution of digital asset derivatives. Its sharp point signifies price discovery via RFQ protocols. The central Execution Management System EMS orchestrates multi-leg spread strategies, leveraging deep liquidity pools for block trade processing.](https://options.greeks.live/wp-content/uploads/2025/07/precision-rfq-execution-engine-for-institutional-digital-asset-derivatives.jpg)

Close-out netting is a default-triggered risk mitigation tool that aggregates all trades into one net value; payment netting is a solvent operational tool that simplifies daily cash flows.

- 
### [What Is the Difference between Close-Out Netting and Traditional Set-Off Rights?](https://options.greeks.live/question/what-is-the-difference-between-close-out-netting-and-traditional-set-off-rights/)
![An abstract, precision-engineered mechanism showcases polished chrome components connecting a blue base, cream panel, and a teal display with numerical data. This symbolizes an institutional-grade RFQ protocol for digital asset derivatives, ensuring high-fidelity execution, price discovery, multi-leg spread processing, and atomic settlement within a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-precision-execution-1.jpg)

Close-out netting is a contractual system terminating all trades upon default to yield a single net value, mitigating counterparty risk.

- 
### [How Does the Valuation of Complex Derivatives Impact the Execution of a Close out Netting Agreement during a Crisis?](https://options.greeks.live/question/how-does-the-valuation-of-complex-derivatives-impact-the-execution-of-a-close-out-netting-agreement-during-a-crisis/)
![A segmented circular diagram, split diagonally. Its core, with blue rings, represents the Prime RFQ Intelligence Layer driving High-Fidelity Execution for Institutional Digital Asset Derivatives. Outer segments denote RFQ protocols and order flow pathways, reflecting Market Microstructure for Private Quotation.](https://options.greeks.live/wp-content/uploads/2025/08/high-speed-prime-os-rfq-digital-asset-derivatives-trade-execution.jpg)

Valuation of complex derivatives in a crisis dictates the speed and efficacy of close-out netting, defining financial recovery.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://options.greeks.live"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Question",
            "item": "https://options.greeks.live/question/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "What Is the Role of the ISDA Master Agreement in Preventing the Cherry-Picking of Trades?",
            "item": "https://options.greeks.live/question/what-is-the-role-of-the-isda-master-agreement-in-preventing-the-cherry-picking-of-trades/"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Organization",
    "@id": "https://greeks.live/#organization",
    "name": "Greeks.Live",
    "url": "https://greeks.live/",
    "description": "Greeks.live is the definitive toolkit for the professional options trader, dedicated to empowering our users with institutional-grade data, advanced analytics, and a comprehensive suite of trading tools designed to provide a decisive edge in the market. Every article and guide published under the Greeks.live name is a product of our deep commitment to data-driven analysis and our mission to support the global trading community.",
    "email": "support@greeks.live",
    "logo": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/Greeks.Live-Logo-Icon.svg"
    },
    "hasPart": [
        {
            "@type": "WebSite",
            "name": "About Us",
            "url": "https://about.greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "App Download Page",
            "url": "https://about.greeks.live/#/download/basic_trade"
        },
        {
            "@type": "WebSite",
            "name": "Newcomers' Guide",
            "url": "https://twisty-sign-c8b.notion.site/Guide-for-Greeks-live-X-Deribit-Newbies-5a08a3052822427d800af6eaf3704c8d"
        },
        {
            "@type": "WebSite",
            "name": "Knowledge Base",
            "url": "https://linktr.ee/greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "Option Terminology",
            "url": "https://greekslive.notion.site/88dfc00e7c584d4d8969b6302a79a12f?pvs=4"
        },
        {
            "@type": "WebSite",
            "name": "Terms of Service",
            "url": "https://greeks.live/#/tos"
        },
        {
            "@type": "WebSite",
            "name": "Disclaimer",
            "url": "https://greeks.live/#/disclaimer"
        }
    ],
    "sameAs": [
        "https://x.com/greekslive",
        "https://youtube.com/@greeks_live?si=-KjT0Lkw4WUCI0tD",
        "https://t.me/greekslive_notifications",
        "https://t.me/greekslive",
        "https://pinterest.com/greekslive/"
    ],
    "makesOffer": [
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "RFQ Platform",
                "url": "https://rfq.greeks.live",
                "description": "Execute institutional-grade block trades for crypto options and futures. This platform provides deep, over-the-counter (OTC) liquidity via a professional Request for Quote system.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Lending Tools",
                "url": "https://lend.greeks.live",
                "description": "Manage crypto lending and borrowing activities to earn yield or secure loans. This suite of tools helps users analyze interest rates and manage collateralized debt positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Data Lab",
                "url": "https://greeks.live/#/deribit/tools/datalab/BTC",
                "description": "Analyze historical and real-time options data with advanced metrics. This tool is designed for backtesting strategies and identifying market trends through comprehensive data visualization.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Profit & Loss Analysis (PnL)",
                "url": "https://greeks.live/#/deribit/tools/pnl_analysis",
                "description": "Track and analyze the Profit and Loss (PnL) of your options portfolio. This tool provides detailed performance metrics to help traders evaluate and refine their strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Position Visualization",
                "url": "https://greeks.live/#/deribit/tools/pv/BTC",
                "description": "Visualize complex options positions and their corresponding risk profiles. This tool generates payoff diagrams to help traders intuitively understand potential profit, loss, and exposure.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Options Calculator",
                "url": "https://greeks.live/#/deribit/tools/calculator",
                "description": "Calculate the theoretical price and risk parameters ('the Greeks') of crypto options. An essential tool for pricing new trades and analyzing the sensitivity of existing positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live Main Platform",
                "url": "https://greeks.live/",
                "description": "The central hub for the Greeks.live suite of professional cryptocurrency options and derivatives trading tools. Access analytics, manage positions, and explore the ecosystem.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Community Forum",
                "url": "https://t.greeks.live",
                "description": "Join the official Greeks.live community. Connect with other traders, share insights, and receive the latest updates directly from the team.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for Deribit",
                "url": "http://deribit.greeks.live",
                "description": "A dedicated interface for trading on the Deribit exchange. This platform leverages Greeks.live's advanced analytics and tools specifically for users of Deribit's options and futures markets.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for OKX",
                "url": "http://okx.greeks.live",
                "description": "A dedicated interface for trading on the OKX exchange. This platform integrates Greeks.live's powerful analytics with the OKX marketplace, focusing on its options and derivatives products.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "GLVS.AI Trading Platform",
                "url": "https://www.glvs.ai/",
                "description": "An AI-powered platform for automated crypto options trading. Leverage advanced algorithms and data-driven signals to develop and deploy sophisticated, hands-free trading strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "API Testnet & Sandbox",
                "url": "https://test.greeks.live",
                "description": "A dedicated testnet environment for developers to test their API integrations and automated trading strategies. This sandbox allows for full functionality testing without risking real funds.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        }
    ],
    "subOrganization": [
        {
            "@type": "Organization",
            "name": "GreeksLive HK Co., Limited",
            "email": "support@greeks.live",
            "telephone": "+852-56418949",
            "address": {
                "@type": "PostalAddress",
                "streetAddress": "Unit 11, 27/F, K. Wah Centre, 191 Java Road",
                "addressLocality": "Hong Kong",
                "addressRegion": "North Point",
                "addressCountry": "CN",
                "postalCode": "0000"
            },
            "geo": {
                "@type": "GeoCoordinates",
                "latitude": "22.2932357",
                "longitude": "114.2022026"
            },
            "image": "https://options.greeks.live/wp-content/uploads/2025/08/Wah-Centre-Hong-Kong.jpg"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://options.greeks.live/question/what-is-the-role-of-the-isda-master-agreement-in-preventing-the-cherry-picking-of-trades/"
    },
    "headline": "What Is the Role of the ISDA Master Agreement in Preventing the Cherry-Picking of Trades? \u25b4 Question",
    "description": "The ISDA Master Agreement legally consolidates all trades into one contract, forcing an all-or-nothing settlement to block cherry-picking. \u25b4 Question",
    "url": "https://options.greeks.live/question/what-is-the-role-of-the-isda-master-agreement-in-preventing-the-cherry-picking-of-trades/",
    "datePublished": "2025-08-03T16:43:55+00:00",
    "dateModified": "2025-10-24T15:06:59+00:00",
    "articleSection": [
        "Question"
    ],
    "author": {
        "@id": "https://greeks.live/#organization"
    },
    "publisher": {
        "@id": "https://greeks.live/#organization"
    },
    "image": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-driving-optimal-liquidity-aggregation-for-precise-price-discovery-and-atomic-settlement.jpg",
        "caption": "Abstract, overlapping translucent circular forms with intersecting lines converge on a central aperture against a dark backdrop. This visual metaphor illustrates the sophisticated market microstructure of institutional digital asset derivatives trading. It highlights the RFQ protocol's role in dynamic liquidity aggregation, enabling high-fidelity execution and precise price discovery for complex multi-leg spread strategies. The central core signifies an advanced Prime RFQ facilitating atomic settlement and robust counterparty risk mitigation for alpha generation."
    },
    "keywords": [
        "Cherry-Picking",
        "Close-Out Netting",
        "Counterparty Risk",
        "Early Termination",
        "Early Termination Amount",
        "Event of Default",
        "Insolvency Proceedings",
        "ISDA Master Agreement",
        "Netting Opinions",
        "Non-Defaulting Party",
        "Section 1(C)",
        "Section 2(A)(Iii)",
        "Single Agreement",
        "Single Agreement Clause",
        "Single Net Amount",
        "Swaps and Derivatives",
        "Systemic Risk"
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "WebSite",
    "url": "https://options.greeks.live/",
    "potentialAction": {
        "@type": "SearchAction",
        "target": "https://options.greeks.live/?s=search_term_string",
        "query-input": "required name=search_term_string"
    }
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "FAQPage",
    "mainEntity": [
        {
            "@type": "Question",
            "name": "How Does The Agreement Alter Insolvency Outcomes?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The strategic impact of the ISDA framework becomes clear when comparing insolvency scenarios with and without the agreement in place. The presence of the agreement fundamentally shifts the balance of power and the final economic result away from a chaotic, piecemeal liquidation toward an orderly, predictable settlement."
            }
        },
        {
            "@type": "Question",
            "name": "What Is The Role Of Legal Enforceability In Execution?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The entire mechanical process of close-out netting depends on a final, critical element of execution: its legal enforceability in the jurisdiction of the insolvent counterparty. The contractual provisions of the ISDA Master Agreement are powerful, but they must hold up in a court of law during bankruptcy proceedings, which are governed by local statutes that can override private contracts."
            }
        }
    ]
}
```


---

**Original URL:** https://options.greeks.live/question/what-is-the-role-of-the-isda-master-agreement-in-preventing-the-cherry-picking-of-trades/
