On the other hand, the bid-ask spread for a high-yield credit default swap index could range between 0.15% and 0.2% of the derivative’s value, according Nick Maroutsos, co-head of global bonds at Janus Henderson.
In times of trouble, trading costs for corporate debt can skyrocket. The bid-ask spread for high-yield bonds doubled as a plunge in oil prices rocked the energy sector in 2016, and quintupled from current levels during the 2008 financial crisis, according to Pimco’s estimates in August 2018.
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