bolligerallstar

I agree, would have to look at the text again, if a holding company is going to fail, buy the CDS and sell the CDS on the sub if its in good shape.
What I understand a cap structure trade to be is that you benefit off the spread btw the buy/sell.
Sell CDS 200bps
Buy CDS 100bps
**Collect 100bps spread and hope the spread increases i.e. an event occurs or keep the premium