Negative basis trade: related pages

A credit derivative that transfers default risk.

The difference between the rate of return on a security (or a market or an investment) and the risk free rate of return.

Monoline insurer

An insurer that has a single line of business that, in a financial markets context, is insuring bond repayments.

Liquidity

How tradeable a security is. A security that is constantly trading in large quantities it is can be bought or sold easily, quickly and with less likelihood of influencing the price.

Positive basis trade

Selling both a CDS with a higher spread than yield spread on the bond it hedges