The premature termination of a contract – with compensation payment of the market value and – simultaneous conclusion of a new transaction – for the duration of the remaining term of the original transaction, – but now at current market conditions. – Close-and-reprice serves the same purpose as variation margin, namely to adjust the collateral amount for accrued gains or losses. It is mainly used where a margin call is not legally possible. – See cash settlement, European Master Agreement, credit, short-term, margin settlement, margin call, variation margin.
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