CDS Index

A CDS index, or Credit Default Swap index, is a financial tool that tracks the credit risk of a group of companies. It bundles together multiple credit default swaps, which are contracts that offer protection against a borrower defaulting on their debt. Investors use CDS indices to gauge the overall risk of default in a specific market or sector, allowing them to manage investment risk or speculate on credit trends. The index reflects the average cost of protection against defaults for the included entities, providing insight into market perceptions of creditworthiness.