FREE Guide - 5 Chart Patterns You Need to Know!

Credit Default Swap - CDS


What does Credit Default Swap - CDS mean?

A credit default swap (CDS) is similar to an insurance against credit risk. CDS transfers the credit exposure of the underlying fixed-income products such as bonds.

Futures Knowledge Explains Credit Default Swap - CDS

A CDS is a credit derivative. The buyer of a credit default swap gets credit risk protection for a fee.  He makes periodic payments to the seller in exchange for a commitment to a payoff if a third party defaults. The risk of default gets transferred from the bondholder to the seller of the CDS. A CDS is also used by speculators without owning the underlying debt security. The buyers here speculate on the potential for default of repayment.



Get Your FREE Technical Analysis Guide!
Timing is everything, and with this guide, you'll learn how technical analysis can help find the right time to enter and exit your futures trades. Nearly 30 explanations and examples of the most popular technical analysis tools are all in this one handy guide. It's like having a futures trading mentor at your side!