You are here: Home » Glossary » Riskless principal

Riskless principal

A basis for trading in which completion of the trade is contingent on one of the parties having completed the sale or purchase of the asset to another party. Riskless principal allows a party to act in a role similar to that of a broker and is a common way for relatively illiquid credit instruments to trade. However, it is different from a pure agent role, in which the broker is not a party to the trade.

Related stories

Christopher Street Capital goes it alone with big-name hires 2 years ago
Brokers: Welcome to the new Street 2 years ago