How can I trade CDS

Discussion in 'Trading' started by xyannix, Mar 14, 2009.

  1. A CDS is a bilateral OTC contract, which means that, theoretically, no two CDSs are created equal.
    #21     Mar 16, 2009
  2. sjfan


    There are various trade conventions that makes them more-or-less tradeable (otherwise it's hard to have a market). It's a lot like on-the-run off-the-run nature of rates swaps.

    As far as the ICE development is concerned, it's my understanding that only dealers will be facing them. Institutional traders will face the dealers who face ICE.

    I don't think full blown cds trading will be available for retail any time soon.
    #22     Mar 16, 2009
  3. IR swaps can't be on-the-run/off-the-run. You're confusing them with bonds. A CDS is an OTC contract that can be valued by any counterparty, given the reference obligation, maturity and other pertinent info.
    #23     Mar 16, 2009
  4. sjfan


    I'm not. I meant it in the sense that the all CDS 5Y contracts written in the next few months until the roll date will have the same expiration date, despite that it's not truly 5Y.

    Furthermore, you can usually find a dealer to take off a 4.2Y contract. I loosely call these contracts off-the-run (which is the term JPM likes to use).
    #24     Mar 16, 2009
  5. I see what you mean... In IRS land, the on-the-run/off-the-run terminology is not used, 'cause it's easily confused with bonds.
    #25     Mar 16, 2009
  6. sjfan


    point taken. don't trade irs much.
    #26     Mar 16, 2009