Cds

SanMiguel · Aug 13, 2010

Are there any companies offering CDS in the UK?
Just interested in having a look and finding out about them.

You might all be interested in this thread: http://www.zerohedge.com/article/arbing-moodys-sovereign-ratings-cds-pair-trades#comment-519484

cr6196 · Aug 13, 2010

basically no. you need to go through a big institution broker, the deal sizes are massive (for the retail punter) and they are very illiquid...just read the comments on your link. Also more speculatively, the vast majority of people who use cds contracts probablly aren't looking to scalp a basis point or trade out of their position again...apart from market makers.

Martinghoul · Aug 13, 2010

First of all, ZH is full of sh1t. Secondly, CDS is an OTC product, which means that you need to have an ISDA signed with a counterparty to deal. Eurex was offering futures on some CDS indices (iTraxx), but that, basically, went nowhere. Maybe, given all the recent malarkey over sovereign solvency, someone will let you play with the SovX index, but that's highly unlikely.

SanMiguel · Aug 13, 2010

Martinghoul said:
First of all, ZH is full of sh1t. Secondly, CDS is an OTC product, which means that you need to have an ISDA signed with a counterparty to deal. Eurex was offering futures on some CDS indices (iTraxx), but that, basically, went nowhere. Maybe, given all the recent malarkey over sovereign solvency, someone will let you play with the SovX index, but that's highly unlikely.

Just interested in the arb opportunity.

You don;t like ZH?

gooseman · Aug 13, 2010

hindenburg article sums it up. ZH is a pile of crap.

to all intents and purposes just trade the bond futures if you want exposure.

SanMiguel · Aug 13, 2010

gooseman said:
hindenburg article sums it up. ZH is a pile of crap.

to all intents and purposes just trade the bond futures if you want exposure.

Yeah, I didn;t like that article either but they're probably just having a laugh.

So, for example if you thought Spain would default you would short Spanish bonds?
In the CDS example they talk about buying Spanish bonds, shorting Japanese.
In the bond market, you would short Spanish bonds, long Japanese bonds?

Isn't that the same as playing the yield spread on bonds?

Cds

SanMiguel

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cr6196

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Martinghoul

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SanMiguel

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gooseman

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SanMiguel

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