To digress, Deutsche Bank shares fell more than 25% in the selloff Friday last week, March 24. As reported, the five-year or senior credit default swaps of Deutsche Bank had been downgraded so low by speculators that “the cost of insuring it has surged to its highest level since 2019.” A credit default swap is a derivative product that allows bondholders to “swap or offset” against the risk of default with another investor who agrees to reimburse them, as in this case with Deutsche Bank.
In this connection, it may amuse you to know that there are two popular styles used to apply them in a trading system which, in turn, is used how to call what type of investor they are. They are also easily identified for what they do when the market or stock goes into a rally or when it is on a retracement or consolidation .