Current Exposure Method
A method of measuring the cost of default within a swap agreement.

Investopedia Says:
An investors total exposure is equal to the replacement cost of all marked to market contracts currently in the money, plus the credit exposure risk of potential changes in future prices or volatility of the underlying asset.

Also known as Current Pre-settlement Exposure.

Related Terms:
Credit Risk
Default Risk
In the Money
Settlement Risk
Swap

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