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, fixed and/or recovery:
“Self-expression is not enough; experiment is not enough; the recording of special moments or cases is not enough. All of the arts have broken faith or lost connection with their origin and function. They have ceased to be concerned with the legitimate and permanent material of art.”
—Jane Heap (c. 1880–1964)
“These earthly godfathers of Heaven’s lights,
That give a name to every fixed star,
Have no more profit of their shining nights
Than those that walk and wot not what they are.”
—William Shakespeare (1564–1616)
“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)