Derivatives Credit : Credit Derivatives part II


As I left the space to define the various types of credit derivatives so here we go:

Credit default swap: Credit default swap can literally be defined as an option to swap a credit asset for cash, should it default. A credit default swap is essentially an option, and option bought by the protection buyer, and written by the protection seller. The strike price of the option is the par value of the reference asset. Continue reading “Derivatives Credit : Credit Derivatives part II”