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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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?