Credit, Equity, Total-Return, and Volatility Swaps

Credit, equity, total-return, and volatility swap terms cover derivatives that transfer credit risk, equity exposure, asset returns, realized variance, or volatility exposure.

In this section

• Credit Default Swap (CDS): Transferring Credit Risk for a Price
  Learn what a credit default swap is, how protection payments work, and why CDS contracts matter in credit markets, hedging, and default risk analysis.
• Equity Swap: Definition, Functionality, and Practical Examples
  An equity swap is a financial agreement where parties exchange cash flows, enabling each to diversify income while retaining original assets. This article explores its definition, workings, and practical examples.
• Index CDSs: A Financial Instrument to Mitigate Idiosyncratic Risk
  Index CDSs, or Credit Default Swaps, cover a basket of entities, thereby reducing idiosyncratic risk. This article provides a comprehensive overview, historical context, types, key events, mathematical models, and much more.
• Total Return Swap (TRS): Meaning and Example
  Learn what a total return swap is and how it transfers the total economic performance of an asset without requiring direct ownership.
• Variance Swap: Definition, How It Works, and Comparison with Volatility Swap
  A detailed exploration of variance swaps, including their definition, operational mechanics, and a comparison with volatility swaps.
• Volatility Swap: Definition, Mechanics, and Practical Examples
  A comprehensive guide to understanding Volatility Swaps, including their definition, underlying mechanics, practical examples, and applicability in financial markets.
• Zero-Basis Risk Swap (ZEBRA): Meaning and Context
  Learn what a zero-basis risk swap is and why basis-management structures