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 Protection Short CDS = Sell Credit Protection
or
2.) Long CDS = Sell Credit Protection Short CDS = Buy Credit Protection
On many sites such as 300Hours, AnalystForum I see that Long CDS = Seller of protection = expecting the underlier to improve and Short CDS = Buyer of protection = expecting the underlier to deteriorate
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