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Questions tagged [credit-default-swap]

A credit default swap (CDS) is a particular type of swap designed to transfer the credit exposure of fixed income products between two or more parties.

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Can Credit Default Swap have a variable premium as the risk of default go down?

If the risk of underlying entity goes up, then shouldn't the premium for CDS go up as well? are CDS premium always fixed by default?
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Why would someone sell credit default swaps for companies with high chance of defaulting?

Similarly, why would anyone buy credit default swaps for companies with low chance of defaulting?
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Are Credit Default Swaps an adequate hedge for leveraged bond portfolio?

A hedge is supposed to be a cheaper bet that pays off if a primary bet isn't profitable. With a leveraged bond portfolio, my understanding is that a credit default swap (CDS) can help hedge, but I'm ...
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The Big Short - shorting vs CDS

I am wondering, why the main protagonists of the movie "The Big Short" bought CDS, which were actually custom made for them and quite expensive. Why they couldn't / didn't speculate on decline of ...
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What is credit default swap rate?

I understand that for a credit default swap (CDS), its CDS spread is the rate of payments that the buyer of the CDS makes to the seller in each year. I also heard of "CDS rate". I wonder how it is ...
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What exactly is a credit default swap?

I hear a lot about credit default swaps (CDSs) and I do not really know what they are. Can you please explain it to me? What are they good for?