Win some, lose some

Hedge funds are always looking for new ways to make money out of mergers and acquisitions and other credit events. They should take a closer look at credit default swaps. These have always been considered a proxy for investing in cash debt and would therefore behave in a similar way to the underlying bonds. But in recent deals they have fluctuated wildly, independent of the bonds. This volatility may offer canny investors some interesting arbitrage opportunities. These opportunities have arisen ...