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Credit default swap. A credit default swap ( CDS) is a financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event. [1] That is, the seller of the CDS insures the buyer against some reference asset defaulting.
A credit default swap index is a credit derivative used to hedge credit risk or to take a position on a basket of credit entities. Unlike a credit default swap, which is an over the counter credit derivative, a credit default swap index is a completely standardized credit security and may therefore be more liquid and trade at a smaller bid–offer spread.
Credit default swaps are a portfolio management tool that gained notoriety during the peak of the 2008 financial crisis. These derivative investments are bit more complex than stocks, mutual funds ...
e. In finance, default is failure to meet the legal obligations (or conditions) of a loan, [1] for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity. A national or sovereign default is the failure or refusal of a government to repay its national debt .
Credit default swaps are about as opaque an investment as you can get, and the big Wall Street banks aren't much better. In that spirit, here's a delightfully straightforward investment The Motley ...
Central counterparty clearing. A central clearing counterparty ( CCP ), also referred to as a central counterparty, is a financial market infrastructure organization that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement services for trades in foreign exchange, securities, options, and ...
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The credit default swap or CDS has become the cornerstone product of the credit derivatives market. This product represents over thirty percent of the credit derivatives market. The product has many variations, including where there is a basket or portfolio of reference entities, although fundamentally, the principles remain the same.
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related to: apa itu credit default swap