Credit Default Swaps Makeover

CBOE says its new exchange-traded version offers more hedging flexibility.

Credit default swaps (CDS) were stigmatized for their role in the financial crisis, but a new exchange-traded version may breathe life back into the notion of CDS as a tool that companies can use to analyze and potentially hedge credit risk.

“Anything we can do that sheds more light on corporate liquidity and credit is fabulous,” says Jerry Flum, CEO of CreditRiskMonitor, which provides real-time financial analysis and news.

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