Deutsche Banks, get in here!
I think those are credit default swaps - going out of business insurance…Never dealt with CDs.
Is that saying that the interest rate they offer on CDs has doubled? Effort to get deposits?
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Never dealt with CDs.
Is that saying that the interest rate they offer on CDs has doubled? Effort to get deposits?
Sent from my iPhone using the svtperformance.com mobile app
CDS refers to a Credit Default Swap.
It is effectively an insurance contract on the bonds of an issuer.
The way it works is you pay a premium to the seller and then settle up for the difference.
You can also trade CDS like stocks.
If the reference entity (in this case Deutsche) is experiencing credit distress its CDS will widen out. That is what the graph is illustrating.
It is how you short bonds.
The CDS market is huge but it is for big boys only. You need an ISDA to trade which means you need a huge balance sheets so it is kimited to institutional jnvestors. Retail schmucks not allowed.
CDS refers to a Credit Default Swap.
It is effectively an insurance contract on the bonds of an issuer.
The way it works is you pay a premium to the seller and then settle up for the difference.
You can also trade CDS like stocks.
If the reference entity (in this case Deutsche) is experiencing credit distress its CDS will widen out. That is what the graph is illustrating.
It is how you short bonds.
The CDS market is huge but it is for big boys only. You need an ISDA to trade which means you need a huge balance sheets so it is kimited to institutional jnvestors. Retail schmucks not allowed.
CDS refers to a Credit Default Swap.
It is effectively an insurance contract on the bonds of an issuer.
The way it works is you pay a premium to the seller and then settle up for the difference.
You can also trade CDS like stocks.
If the reference entity (in this case Deutsche) is experiencing credit distress its CDS will widen out. That is what the graph is illustrating.
It is how you short bonds.
The CDS market is huge but it is for big boys only. You need an ISDA to trade which means you need a huge balance sheets so it is kimited to institutional jnvestors. Retail schmucks not allowed.
So the graph is illustrating the rate DB is paying to whomever is covering their debt?
Analogy being a low income/high risk person getting terrible rates on auto/home/CC?
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Lmao. This is crazy.Separately, you can swap anything it is crazy.
I have negotiated pricing on Dutch mortality risk. The trade was if US life expectancy exceeds Dutch life expectancy the counterparts pays me. If vice versa I pay them.
This is actually a fairly vanilla swap believe it or not.
If you are a Dutch pension plan you havemassive risk to life expectancy with few options to diversify it.
They way you do it is you sell it to someone that has a similar risk.
In this sense you "swap" it.
I was standing in the middle of a US life insurer over exposed to life expectancy in the US and a Dutch pension over exposed to life expectancy in the Netherlands.
They "swap" and I keep a piece.
I'm confused as to where all of this chaos is heading. What are the cliffnotes to the future?