WHAT'S UP IN THE CREDIT DEFAULT SWAP MARKET?

Bloomberg recently noted that there has been an increase in CDS trading for hedging purposes, with first half CDS index volume rising to the highest level in 5 years, and JPM adding that derivative trading volume jumped 65% Y/Y in the first half of 2018...

... the product generally remains a mystery for a generation of credit traders (Citi recently poached a 32-year-old trader from Goldman to "rescue" its junk bond desk as few others there had any familiarity with trading credit default swaps following its demonization after the financial crisis) and with dealer swap inventories virtually non-existent, the bulk of traders have continued to use ETFs as a method to hedge their exposure.