Gents,
can someone confirm:
long cds = short protection
short cds = long protection
cheers
Yes, this is right! when you long cds you long the credit quality of issuer, and you can gain from shorting protection.
well i think he who longs a cds should be a swap buyer and longs the protection as the notes read
Think like this way, CDS is always reverse direction of holding cash bonds. So long CDS means short bonds(or short credit risk of issuer and buy protection when credit event happens)
The CDS Protection Buyer promises to make a series of future payment and is known as the Short. The CDS Protection Seller is known as the Long.
The Protection Buyer or the _ Short benefits _ when things _ go bad _ i.e if the credit quality of the underlying instrument declines and the CDS Spread increase.
The Protection Seller or the _ Long benefits _ when things _ go well _ i.e if the credit quality of the underlying instrument improves and the CDS Spread decrease.
I normally stick to this:
Buy CDS = Short position on CDS
Sell CDS = Long position on CDS