iTraxx Definition is a financing tool that allows investors to hedge their portfolios against credit risk. It is a credit default swap (CDS) index that tracks the performance of a basket of underlying credit instruments. The iTraxx Definition is used by investors to manage their credit risk exposure and to make informed investment decisions. What is single name CDS? A single name credit default swap (CDS) is a contract that allows an investor to trade the credit risk of a single company in the form of a derivative instrument. This type of CDS can be used to hedge against the risk of a company defaulting on its debt obligations, or to speculate on the likelihood of a company experiencing financial distress.
Single name CDS contracts are typically traded in the over-the-counter (OTC) market, and are not exchange-traded. The size of a single name CDS contract is typically $10 million, although some contracts may be for larger or smaller amounts.
The terms of a single name CDS contract specify the reference entity (the company whose credit risk is being traded), the notional amount, the maturity date, the credit event(s) that would trigger a payment on the contract, and the payment schedule.
A single name CDS contract is typically settled in cash, meaning that if a credit event occurs, the buyer of the CDS contract will receive a cash payment from the seller. The size of the payment is typically based on the notional amount of the contract, but may be modified by other terms in the contract, such as the creditworthiness of the reference entity at the time of the credit event. What is CDX HY? CDX HY is an index of high yield corporate bonds that is used as a benchmark for trading in the credit default swap (CDS) market. The index is composed of 100 equally-weighted bonds with maturities of five years or less. The bonds included in the index are issued by companies with below-investment-grade credit ratings.
The CDS market is a market for trading credit default swaps, which are financial contracts that provide protection against the risk of default on a bond or loan. Credit default swaps are used by investors to hedge against the risk of default, or to speculate on the creditworthiness of a bond issuer.
The CDX HY index is used as a benchmark for trading in the CDS market because it provides a measure of the overall credit risk of a portfolio of high yield corporate bonds. The index is used by investors to manage their exposure to credit risk, and by traders to take positions on the creditworthiness of bond issuers.
What is a CDX Series? A CDX is a credit default swap (CDS) index that tracks the creditworthiness of a group of companies. A CDS is a financial contract that pays the buyer of the contract if the company defaults on its debt obligations.
The CDX Series is a group of CDS indices that are used to track the creditworthiness of different sectors of the market. The CDX Series includes the following indices:
- CDX Investment Grade: This index tracks the creditworthiness of companies in the investment grade sector.
- CDX High Yield: This index tracks the creditworthiness of companies in the high yield sector.
- CDX Emerging Markets: This index tracks the creditworthiness of companies in the emerging markets sector. What is the Aussie iTraxx? The Aussie iTraxx is a credit default swap (CDS) index that tracks the performance of 25 investment-grade Australian companies. It is one of the most popular CDS indices in the world, and is used as a benchmark for pricing and trading credit default swaps on Australian companies.
What is an investment grade company? An investment grade company is a company that is rated as having a low risk of default by credit rating agencies. Investment grade companies are typically large, well-established companies with strong financials. They usually have a diversified business model and a history of consistent profitability. Investment grade companies are often considered to be a safe investment, and their bonds are typically used by institutional investors such as pension funds and insurance companies.