iTraxx indices

[Meidav]

Hi everybody!

I have a question concerning credit default swap indices, like iTraxx.
Say on the 9th of April, the "Markit iTraxx Europe 5 Y" index has a bid spread of 101.36 and an ask spread of 102.86.
What does that mean? How can I read out of this index how expensive it is to insure myself against a credit event for investment grade european bonds?

Many thanks,

Dave

 

[A Dashing Blade]

CDS's are quoted as the percentage per year you pay of the sum you want to insure.
Eg 102.86 offered = 1.0286%
Its payable in quarterly installments.
Min size to insure however is 10m or 25m depending on the sub-type.

FYI US Goct CDS's ie on TBonds trade at around 20 ie 0.2%