Buying a credit default swap (CDS); a long position in a credit default swap (CDS). It is equivalent to shorting credit risk, i.e., having a short exposure on the credit market (bond/ loan market). This is the position taken by a protection buyer whereby the buyer shorts the credit and pays the periodical premiums (CDS price).
Derivatives
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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