It stands for collateral to market derivative (collateralized to market derivative); a derivative contract/ instrument that the out-of-the-money counterparty (losing counterparty or party with the loss position) is required under which to make periodic margin payments corresponding to the amounts by which the contract/ instrument is ‘out of the money’ (the gain position) for that. The periodic payments are usually made daily.

Whether cleared (cleared derivative) or not (uncleared derivative), it requires the out-of-the-money counterparty to periodically transfer to the in-the-money counterparty the value of collateral equal to the cumulative marked to market (MTM) of the derivative contract.