Credit default swap (CDS): related pages

Swaps

An agreement to exchange one stream of cash flows for another, often used to switch currencies and interest rates (fixed vs floating).

Short position

An investor who has sold a security without owning it has a short position in it.

Long position

An investor who has a holding of a particular security has a long position in it.

Negative basis trade

A negative basis trade exploits an arbitrage opportunity created by a difference between the price of a bond and the price of a credit default swap that hedges it