A credit derivative is an instrument whose value depends on the creditworthiness of a particular organisation, asset or entity, as evidenced by a credit rating, by some event of default or by another measure of financial standing.
A CDS is a credit derivative in which one party makes payments to the other party in return for agreed compensation if there is a default (a credit event) relating to some third party.
A synthetic CDO is an asset whose value depends on the values of a pool of underlying CDSs.
A first-to-default basket is an asset whose value depends on the value of the weakest within a pool of underlying CDSs.
The value of traded financial ...