Hi All,
Just have a question regarding the CDS trades, I have seen few of my client who trades in CDS, have noticed few trades in which underlying getting expired before CDS does.
For eg: State of Connecticut its one of reference obligation getting expire on Jan 2018 and CDS on this underlying getting expire on June 2025. Just wanted to know what is logic behind it, why someone will enter in CDS and pay spreads even the underlying obligation is getting expired before cds get’s expire? On what they are betting on?
Thanks.