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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: forceOfHabit who wrote (101166)	2/11/2009 6:00:59 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 110194

Where on God's green Earth did you get the idea that shorting bonds could somehow result in unlimited losses? That's simply ridiculous Don't ask me, ask George Soros: The second step is to understand credit default swaps and to recognise that the CDS market offers a convenient way of shorting bonds. In that market the asymmetry in risk/reward works in the opposite way to stocks. Going short on bonds by buying a CDS contract carries limited risk but unlimited profit potential; by contrast, selling credit default swaps offers limited profits but practically unlimited risks. ft.com Hawk