Credit Default Swaps

Discussion in 'Financial Futures' started by nitro, Apr 22, 2005.

  1. KMG is subject of a tender, earnings on Wednesday, and a takeover attempt by Carl Ichan...good to look and see? :)
     
    #21     Apr 26, 2005
  2. Hmm... interesting..
     
    #22     Apr 26, 2005
  3. nitro

    nitro

    Let there be no doubts left in any one's mind that CDS can move SIFs

    However, I think they do so only indirectly.

    nitro
     
    #23     May 5, 2005
  4. nitro

    nitro

    You know, the reason-detre for CDS is a little bit of a mystery to me - why not just buy a put?

    :confused: nitro :confused:
     
    #24     May 9, 2005
  5. good point, and the equity/corporate debt markets are linked in this way

    however, it is not a perfect link/arbitrage by any means - eg GM last week when the stock went up on Kerkorian's bid and the bonds went down

    the CDS market developed out of a need of banks to directly hedge credit risk



     
    #25     May 9, 2005
  6. sle

    sle

    EDS (equity default swap) is exactly that - a digital far OTM put. CDS is more of a bond spread product, you can think of a long CDS (get protection) as a long position in treasury, short in corporate, swapped into floaters.
     
    #26     May 9, 2005
  7. nitro

    nitro

    MichaelJ, sle,

    Thanks for the explanations.

    nitro
     
    #27     May 9, 2005
  8. I wonder if big AL is pleading with Moody's or Fitch not to downgrade which would force GM paper holders that are hanging on to flush the bonds that are circling the bowl....

    June 1 is fast approaching...better light the other end of the candle there Al..................
     
    #28     May 10, 2005
  9. nitro

    nitro

    I am curious if anyone that has access to the data (MichaelJ/SLE/ChibondKing ?) can verify or deny the question that I originally posted, and can post whether CDS spread has been tightening or getting wider, and whether there is a correlation to higher/lower/steady treasury bond yields? Also, a correlation to the YM/NQ/ES would also be interesting.

    The spoos have gone ballistic recently - I am curious what the CDS are "saying" during this same time of the strong rise...

    nitro
     
    #29     Mar 18, 2006
  10. Darn, I didn't see this until today... i'll have to take a look tomorrow.
     
    #30     Jun 29, 2006