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.
Read more about this topic: Recovery Swap
Famous quotes containing the words connection to, connection, fixed and/or recovery:
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—Gaston Bachelard (1884–1962)
“The virtue of art lies in detachment, in sequestering one object from the embarrassing variety. Until one thing comes out from the connection of things, there can be enjoyment, contemplation, but no thought.”
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“It is the fixed that horrifies us, the fixed that assails us with the tremendous force of mindlessness. The fixed is a Mason jar, and we can’t beat it open. ...The fixed is a world without fire--dead flint, dead tinder, and nowhere a spark. It is motion without direction, force without power, the aimless procession of caterpillars round the rim of a vase, and I hate it because at any moment I myself might step to that charmed and glistening thread.”
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“With any recovery from morbidity there must go a certain healthy humiliation.”
—Gilbert Keith Chesterton (1874–1936)