CDS

CDS

The ISDA CDS Settlement Auction is A Hidden Goldmine for Cash-Rich Accounts

When I discussed the basis trade opportunity, the conclusion was that arbitrage in the secondary (and by extension primary) market exists due to significant dislocations in liquidity. Sure, one can argue that immediate culprits for the arbitrage have to do with counterparty risk and funding costs, which makes sense, but those are merely derivatives of the liquidity disconnects between different brokers, their accounts, and any permutations thereof.

Weekly CDS Change Update Per DTCC - Technical Recommendations

New DTCC weekly change numbers released for week ended January 23. Most notable is the huge gross notional and contractual amount of full terminations of consumer services CDS. Looks like funds are fully covering overhanging shorts. As this has been the most profitable position over the past 3 months it is not too surprising. Based on this technical data, we would recommend establishing short positions in the space due to the diminishing risk of a mass squeeze.

Weekly CDS Change Update Per DTCC - Technical Recommendations

New DTCC weekly change numbers released for week ended January 23. Most notable is the huge gross notional and contractual amount of full terminations of consumer services CDS. Looks like funds are fully covering overhanging shorts. As this has been the most profitable position over the past 3 months it is not too surprising. Based on this technical data, we would recommend establishing short positions in the space due to the diminishing risk of a mass squeeze.

Weekly CDS Change Update Per DTCC

As CDS traders are aware, two months ago, or about the same time Chris Cox wanted to turn everyone that had even the remotest connection to trading CDS into soap, the DTCC started disclosing everything it knows (not all that much) about the CDS market on a weekly basis. At Zero Hedge, we are starting a weekly column that looks at the net additions and reductions, and ergo, net change in the CDS market, from both a notional and contractual point of view, based on DTCC data.

Weekly CDS Change Update Per DTCC

As CDS traders are aware, two months ago, or about the same time Chris Cox wanted to turn everyone that had even the remotest connection to trading CDS into soap, the DTCC started disclosing everything it knows (not all that much) about the CDS market on a weekly basis. At Zero Hedge, we are starting a weekly column that looks at the net additions and reductions, and ergo, net change in the CDS market, from both a notional and contractual point of view, based on DTCC data.