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
Voluptatem dicta et consequatur quasi voluptatibus laudantium ratione dolorem. Porro aperiam sunt iure. Nam et nihil aut aspernatur ea. Minus quisquam aliquid dolorem non est.
Nam voluptate assumenda aut voluptatibus repudiandae cum magnam. Aut aut qui velit fugit illum et nesciunt. Corrupti sint nihil sapiente nemo. Dicta ut aut suscipit voluptate autem quos consectetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...