What are the main things we need to know about Credit Default Swaps? Given the current credit climate, I can see this being tested…
Quite a few things. You should probably spend some time there. Long CDS is buying default protection Short is selling protection Good way to get pure credit exposure.
I used to always screw up what a receiver CDS means. I finally was able to get it straight . . . receiver CDS means you receive the premiums from selling it — long the underlying.
They are defined by the premium as swaptions are defined by the fixed rate.
3_letters Wrote: ------------------------------------------------------- > What are the main things we need to know about > Credit Default Swaps? > > Given the current credit climate, I can see this > being tested… For what it’s worth and you probably know this, but Schweser (either in the notes or videos or both) mentions this is a new topic in 2008.
a few theory questions to tail off an item set for sure… material seems counter-intuitive…got to get your head around it.