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Collateralizing Credit Default Swaps

|Includes:BAC, BCS, BMO, BNPQY, BNS, C, CM, CRARY, CS, DB, DOO, DTN, DUA, EMFN, EUFN, EVR, EWI, EWP, FAS, FAZ, FEFN, GS, JPM, KEY, LUK, MER, MS, NMR, PSCF, RBS, RY, SCGLY, SNF, STI, TD, UBS Group AG (UBS), USB, WFC, XLF
As the credit default swap market is an institutional-only market that requires margin-type accounts to take advantage of the benefits of leverage inherent in the contract, a vast majority (measured by number of participants – not necessarily by amount of money) of investors including retail investors and long-only institutional investors are often unable to participate in this market. The solution for these investors to bypass regulations or restrictions and enter the market is often found in what is called a credit-linked note which are created and sold my all the major Wall Street banks. Here we highlight a recent sale by Deutsche Bank.


Disclosure: long all stocks
Stocks: UBS, DB, DUA, SNF, EWP, EWI, GS, BAC, MER, JPM, WFC, MS, LUK, RY, BMO, BNS, TD, CM, BNPQY, CS, RBS, BCS, NMR, C, SCGLY, CRARY, EVR, STI, KEY, USB, XLF, PSCF, EMFN, EUFN, FEFN, FAS, FAZ, DTN, DOO