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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...
Credit Default Swaps question (Bill Ackman)
I am curious about Credit default swaps, specifically the trade of bill ackman (2.6bn) in 2020. As far as I understand, Bill payed 1.6bn in CDS contracts, and the contracts after spread widening due to corona were worth 4.2bn. The difference would be a 2.6bn profit. However, since the value of the...
Harpooning the Whale
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...
SB here: How does a CDS steepener/flattener work?!
hi guys, may i please get your help on a credit default swap strategy? how does a steepener and flattener work? in plain language please. i know what positions you need to take, but i don't really understand why you need to do it. Flattener = buy short-tern CDS and sell long-term CDS . you think the...
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...
Interesting Read v.letsgetdinged
check out this story...the lesson is to not look a gift horse in the mouth http://www.pitchforkreviewsreviews.com/post/21566…
Swaps on 60 Minutes
Here is the 60 Minutes special on Credit Default Swaps for anyone who missed it. Watch CBS Videos Online
Excessive Leverage
When the I-banks were levering up 30:1 in the past few years, who was providing all these loans and demand? To what extend did CDSs get applied to CDOs during the financial crisis? Did banks only buy the insurance on the "safest" traunches in order to obtain AAA ratings from the credit agencies or...
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