derivative

An equity-implied credit spread is calculated from a host of data from other markets, such as derivatives and interest rates, which is then applied to stocks to determine credit risk.

On March 19, 2005, alone in his office with the door closed and the shades drawn, reading an abstruse textbook on credit derivatives, Michael Burry got an idea: credit default swaps on subprime mortgage bonds.

Leveraged ETFs use complex derivatives like swaps contracts to offer investors magnified bets on an index or, increasingly, on a single stock.

The construct of volatility derivatives has been weakening as well.

“In particular, it aimed to build deeper liquidity in the respective Nordic derivatives markets and create efficiencies. It provided clear benefits for market participants and was public,” a spokesperson said.