Martinghoul
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Huh? CDS are still mostly traded OTC, so you'll need to have an ISDA. The CDS clearing exchanges are not really clearing much of anything yet, in truth.
I agree but is there a plan or a schedule to get a market for cds as we do for index futures for example or options, with a margin account and margin calls?
My understanding was that we were going in that direction given the fact that OTC credit derivatives exponential growth without any control was the main reason of the credit bubble
My understanding was that we were going in that direction given the fact that OTC credit derivatives exponential growth without any control was the main reason of the credit bubble
CDS is only traded OTC atm, I trade CDS for a hedge fund so deal with the sales traders on different IB credit desks. I have no idea how you can PA trade it, not sure its possible. LCH Clearnet are trying to start a centralised clearing house but not all the banks have signed up so i thinks its still going to be a while until it is in place.
I would have through that there is a broker somewhere that can set you up an account with, its gonna cost you loads in margin and spread though. Alot of CDS trade upfront 5% and very risky companies have a margin of 95% upfront, the product is only for institutions really.
Also you would need QuoteVision to keep track of market prices and that cost £1,000 per month alone.
I would have through that there is a broker somewhere that can set you up an account with, its gonna cost you loads in margin and spread though. Alot of CDS trade upfront 5% and very risky companies have a margin of 95% upfront, the product is only for institutions really.
Also you would need QuoteVision to keep track of market prices and that cost £1,000 per month alone.
ok so if I understand if I want to sell a protection a HY with spread at 100bps semin annual for notional 1M
I will recieve every 6 months 100*0.001*1M =100k
If there is a defulat I will have to pay for the notiona minus the recovery: 1M ( 1 - R )
if R =40%
The maximum I can pay should be 600k
So my margin account should have a maximum of 600k in balance if I want to sell this protection
I am right ?
Do you think I can do this as a individual ?
thanks
I will recieve every 6 months 100*0.001*1M =100k
If there is a defulat I will have to pay for the notiona minus the recovery: 1M ( 1 - R )
if R =40%
The maximum I can pay should be 600k
So my margin account should have a maximum of 600k in balance if I want to sell this protection
I am right ?
Do you think I can do this as a individual ?
thanks
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