Does anyone here use these intraday to gauge the direction of Stock Index Futures? Does anyone use them at all? nitro
I think the nature of the CDS market is such that the futures will lead the CDS, rather than the other way around. At the very least, it would be simultaneous. Example, worries about economic weakness will weigh on stocks and will increase CDS spreads. I don't think the lead/lag is exploitable except maybe by the desks that make markets in CDS.
I work at a bank and my group uses CDS all the time. I have Bloomberg & Mark-It Partners (institutional information).
I don't have quotes for cds products, but I watch corporate credit srpeads pretty closely. LQD is a corporate debt etf. I watch the spread of it over IEF, which is the 7-10yr treasury etf.
My current dayjob is entirely in this market (CDS, CDOs). It is the companies primary and sole business. However, I've never been able to associate futures (which I trade privately) with CDS. I understand a tremendous amount about CDS and the CDS market is highly dependent on news and rating agency credit migrations. Furthurmore, transacted spread levels are more difficult to come by since many transactions are made daily but go unreported to the market. Of course, with liquid names, the market for such instruments is readily available. I guess the question would be which CDS reference entity could be easily associated with the Futures Index?
Here at Bear we get CDS from Bloomberg. I have TW (tradeweb), but not Bloomie I agree with makosgu, CDS does not to my knowledge have a correlation with futs. Nitro, come out to one of the meets one friday (not this friday) and i'll give you a quick overview.
Mark Davies's group is very active in single name CDS, they are now merged with corporate desk, so the color on CDS direct from them should be pretty good. As for being an indicator of any sort, the only time when CDS can really be predicting the movement in underlying company is when the company is already in it's uppers and the CDS are trading on expected recovery rate more then anything else. (*) (*) Disclaimer: Take this with a brick of salt, since I trade rates, not credit.