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Long CDS Vs Short CDS - CONFUSION
Fellas, I am confused about the Long and Short terminology we use in relation to Credit Default Swaps (CDS). Ideally when I say 'Long' it means to be a buyer. Ex: Long AAPL (Buy AAPL) but is it the same with CDS? I think it is inverted and the second option is true. 1.) Long CDS = Buy Credit...
Shorting Fixed Income Primers?
Any "classic" guides for CDS, sovereign CDS, and or shorting bonds? Thinking something like Saloman's yield curve series. Happy to track down myself if someone can point me in the right direction. Thanks
Credit Default Swaps for Sovereign Debt
I am a student and have recently started learning about CDS for sovereign bonds in emerging markets and was wondering what are the biggest events that affect its pricing. I am particularly interested in CDS's for countries that are serial debt defaulters in Latin America and Africa. I know the World...
Loan to own / Debt for equity swaps in Europe (Funds)
Hi everyone, what funds do controversial distressed situations in Europe? I am thinking about debt to equity swaps, CDS plays (like the one GSO did where they forced covenant breach and collected on the CDS), loan to own etc. I am thinking about Oaktree, what other funds are there in London/any...
Comparing Spread-Implied Probability of Default with Realized Default Rates
Hi Everyone, I am trying to calculate spread-implied probabilities of default (POD) for the iTraxx Xover index and compare with actual, realized default rates to analyse the correlation. I'm using the spread/(1-Recovery Rate) formula to determine approximate PODs. Today Xover is trading at 302bp,...
Hybrid Securities - McQuown's eBond
John “Mac” McQuown, the inventor of the first equity index portfolio, has built an interesting financial product that is designed to eliminate credit risk from corporate bonds. He calls it the eBond and Bloomberg has written an excellent and highly in-depth piece about it. An eBond, according to...
How do I trade CDX?
Monkeys, I am a super novice to the trading / AM world. My firm is considering to underwrite/ trade CDX and I am tasked to find out how the trade would work. Can anyone please tell me anything/ everything I need to know about how the trade work?
Looking for a credit markets finance role
I have quite a few years experience as a product controller covering cash credit products. Unfortunately I never got the experience I wanted with CDS . I was turned out twice because I lacked solid CDS knowledge. I've done some homework and found some primers which I will begin to study the theory...
CDS trading desk
Is anyone aware of any banks having internal hedging CDS desks? How blurry is the line between hedging and prop and how is this dealt with by the bank?
Where to Find Yield for Grandma
Yields suck now. If you're young, then you offset that with cheap access to capital. That has always been my perspective. There's a double edged sword. I work in the primary markets helping large caps find debt capital. I have become so aligned with my clients pursuit of low cost capital that I have...
Shorting Multi-Family
Aside form buying CDS contracts on multi-family loan pools, are there any other ways to short the MF housing market? Recently traveled to Baltimore, Minneapolis, and Charlotte. Found myself astounded at the amount of MF property that has gone up in the past few years and more importantly, is set to...
Best Asset Class for Trading
Hello, I wish to know which is the best asset class to trade in the coming years among FX, Commodity, Equity, ABS ( including CDS , MBS , RMBS, CMBS, CDO etc) etc. so that one could make very good amount of money. I would appreciate if I could get the pros and cons and the comparison related to...
Would This Repo+CDS Strategy Work?
So, up front I admit that I have limited knowledge of the CDS market and even less of the repo market. But I thought of a strategy today that could hypothetically work with certain assumptions. The crux of the strategy is to attempt to locate inefficiencies in the CDS and Repo markets. The strategy...
Kyle Bass at AmeriCatalyst 2011
For those who saw Kyle at last years AmeriCatalyst, this will be a good watch as well. Bass analyzes and interprets credit events coming to fruition in the near term with respect to Japan, PIIGS and other nations. It would certainly behoove anyone in finance or economics to watch this.
RBC CDS?
Hi all, do you know if a 5Y CDS for Royal Bank of Canada exists? Can't find a quote on Bloomberg or our internal database. If anybody knows about this credit, would be happy if you would let me know. If a CDS exists, would be great if you could post a quote and tell me where to find it on Bloomberg....
Will the Grand European Plan actually work?
Well, Mr. Market obviously thinks the whole thing is super, but after checking out some of the releases, I’m really puzzled how they’ll actually achieve it. You? First of all let’s talk about the haircut. To say that the 50% cut is huge is a spectacular understatement. While the bankers may...
Is Vinyl Making A Comeback?
This month's Forbes had an interesting article about the music industry, specifically that we seem to be in the midst of a mini-revival of LPs, records, and vinyl. http://www.forbes.com/forbes/2011/0718/life-vinyl… Apparently our generation is uncomfortable with having our noise of choice in the...
Will Housing Ever Rebound?
In the olden days, before indoor plumbing folk would hoof it to the nearby well for a bucket of water. Being that we overlook how necessary water is for every day function, trips to the well must have been plentiful. I imagine that this is where the expression going to the well once too often came...
Anyone else wish there was retail access to CDS markets?
Thoughts on creating a long synthetic exposure? Is it even possible?
Sovereign CDS - Payment & Pricing
Can someone explain CDS payments. For example: Say I own $10,000,000 in Italian 5-Yr Bonds. For protection (via a CDS) I would have to pay $376,600 (http://www.cnbc.com/id/38451750)? I'm confused about the payment if my 5-yr bond expires in 3 months and I still want protection. $376,600 is the price...
Something wicked this way comes.
Traders, commence your evil finger pyramids. Retails CDS ’s are coming. I know there’s more than a few John Paulson wannabes here on WSO but, as small investors we never had the chance to bet like the big guys – playing around with exotic CDS’s and prospering from the horrendous failures of...
Cheapest to deliver - CDS
With the option of cash settlement, who cares about physical settlement? Or is it purely to arb the difference between the CTD bond price and the recovery value determined at CDS auction? (and if so, one would think those two would converge quickly anyways, no?)
How is the default probability based on the cost of the CDS contracts calculated?
For something like 10m notional. Let's say the cost of the CDS is 3 .4m up front and 100K annually. How is the probability of default calculated?
CDX Tranche Strategies
Anyone know of any good articles online that discuss tranche trading strategies as well as index positions?
EU hopes for deal on short-selling, CDS curbs
More bad news for all Soros/Tudor/Paulson-wannabes. If this actually goes through, traders are going to be so fucking pissed off. What are your thoughts about this issue? Article: EU hopes for deal on short-selling, CDS curbs Link: http://www.reuters.com/article/2011/10/18/eu-shor…
America's Next Top Bubble...large pension funds
America's next top bubble. Coming soon to your idiot box. Indeed, the large pension funds of America are living in a dream. The dream that 8% annual returns are a reality going forward. If we were to stop and scratch beneath the surface and ask "why were there so many school districts,...
God Bless My SHORTS
I love shorts. Not bermudas, capris or the wedgie causing kind. I love short sellers. They are one of the small cells of the free market which gives lifeblood to the organism. Pumping plasma of personal interest and profit seeking, these folks are often misunderstood and improperly blamed. In what I...
Enough or insufficient - Derivative market regulation
What do you think generally about CCPs? In 2007 the deregulation in OTC derivative markets caused the suprime crisis. Now we have CCPs to clear CDS transactions. US and European politicians want more regulation in the OTC derivative markets. Many EU financial leaders want to dry out the OTC...
CDS For Retail Investors
Looks like the day is coming soon when retail investors can purchase CDS . I've been waiting for this day for a while. Lots of companies I'd like to short but borrow can be a pain and premiums on puts are often too high. They will began trading on 3/8 and are called Credit Event Binary Options...
Credit tranche traders
Anyone trade credit tranches (bespoke, etc)? Curious to know what those desks are like; what sort of analytics are used etc.
Can Individuals Trade Bonds? CDS?
So there are many equity websites out there, Schwabb, etrade, Interactive Brokers, etc. They are great equity and equity option platforms. Does anyone know if individual investors can trade CDS or corporate bonds? What are the liquidity spreads like for bonds? How to Trade CDS as a Retail Investor...
Anyone know how to use a Bloomberg terminal?
I don't know if this is the right forum for this, but I'm looking for CDS data for major creditors ( Citigroup , Goldman Sachs , Morgan Stanley , etc.), does anyone know how to find them using a Bloomberg terminal? If not, is it possible to find accurate data on the web?
Credit Default Swap
Could a knowledgeable individual please explain Credit Default Swaps on a broad level? I'm a bit confused about who sold them, how they work, who gets paid in the event of bankruptcy, and what exactly happened with all the CDSs that Lehman I guess created and sold? Thanks.
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