Connection To Fixed Recovery CDS
A related instrument is a fixed recovery CDS. In theory an RDS protection (receive fixed recovery) can be approximated by buying protection with fixed CDS (binary CDS) and selling the ordinary CDS (writing protection). In reality there may be a slight difference in the terms of the swaps, particularly relating to settlement. It is usually the case that fixed recovery CDS are settled immediately, since there is no need to wait for recovery to be determined, whereas a recovery swap will wait until the ordinary CDS is settled before paying out.
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Famous quotes containing the words connection to, connection, fixed and/or recovery:
“One must always maintain one’s connection to the past and yet ceaselessly pull away from it. To remain in touch with the past requires a love of memory. To remain in touch with the past requires a constant imaginative effort.”
—Gaston Bachelard (1884–1962)
“Children of the same family, the same blood, with the same first associations and habits, have some means of enjoyment in their power, which no subsequent connections can supply; and it must be by a long and unnatural estrangement, by a divorce which no subsequent connection can justify, if such precious remains of the earliest attachments are ever entirely outlived.”
—Jane Austen (1775–1817)
“To find the length of an object, we have to perform certain
physical operations. The concept of length is therefore fixed when the operations by which length is measured are fixed: that is, the concept of length involves as much as and nothing more than the set of operations by which length is determined.”
—Percy W. Bridgman (1882–1961)
“It’s even pleasant to be sick when you know that there are people who await your recovery as they might await a holiday.”
—Anton Pavlovich Chekhov (1860–1904)