Traders Sheltering From Europe Bond Selloff in Overhauled Swaps
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The overhaul of the $18 trillion credit-default swap market came just in time.
As plunging Greek, Italian, Spanish and Portuguese bonds ignite investor concern that Europe’s sovereign debt crisis is returning, traders are seeking protection from turmoil with derivatives. Swaps on Greece rose for a fifth day, jumping 53 basis points to 683 basis points, while contracts on Italy increased 27 to 140, according to data provider CMA.