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Credit Default Swap


bantrader
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Anybody knows if is it possible  to buy a CDS (credit default swap) for a retail investor?

 

I'm thinking to buy a CDS in order to hedge some investments in Russia or to speculate about a possible default by countries like Russia and Venezuela.

 

Please let me know If anyone knows if is it possible and where can i buy it.

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http://www.etf.com/WYDE

 

only way i know of for retail to short credit is the WYDE etf, doesn't seem to have taken off though.

 

you can't trade OTC CDS as a retail investor because that would require you to set up with an investment bank go through KYC process and go through all kinds of counterparty agreements. the bank's trading desk has zero incentive to do it with you unless you are going to be a source of significant business. Since I'm assuming you're not running a $500MM credit book from home, you will not be a source of significant business.

 

you can always attempt to short bonds...not sure  if you can short sovereigns but you're far more likely to be able to do that than pay on CDS.

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