how-to-beat-the-credit-crunch

How to beat the credit crunch

Widening credit spreads can be an investor's friend thanks to a range of new structures that use credit spread options, according to Deutsche Bank.
August 06, 2007
The recent spike in credit spreads caught a lot of investors off guard but there are products now available, even in the private bank market, that can offer a good hedge against short-term credit spread widening.

Deutsche Bank has been marketing a suite of credit volatility structures to distributors since early June and the lucky investors that bought into these products are now walking away with returns that range from 15% upwards on a one-month investment thanks to the timely July spike.

Credit spreads on the five-year iTraxx Europe index of credit default swaps CDS started July at about 25bp, widened to about 36bp by July 25 and then sky-rocketed to almost 70bp by July...
¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222