Credit Default Swap

PV (protection leg) - PV (premium leg ) = upfront payment

“Protection leg is the contigeent payment that credit protection seller may have to make to the credit protection buyer; and the premium leg is the series of payment the credit proteion buyer promises tomake to the credit protection seller.” p.357

anyone can explain why

when PV (protection leg) more than PV (premium leg), the CDS buyer will have to pay the seller?

In order to make the trade have an initial NPV of zero. If i enter into to this trade today, as protection seller, and I know over time i will make more payments to you (protection leg) than you will to me (premium leg), i am going to want an upfront payment to balance this out, otherwise i’m just giving you money for nothing.