I want to create credit default swap positions on several areas of Nigerian finance can someone post here the minimum requirements and the financial agencies that allow such?

davien:
I want to create credit default swap positions on several areas of Nigerian finance can someone post here the minimum requirements and the financial agencies that allow such?

You can't.

I am guessing you watched The Big Short recently.

There are no swaps traded in Nigeria and even globally, you can't trade CDS without an ISDA.

I am guessing you don't have an ISDA.

The only derivatives traded in Nigeria are simple warrants, FX options and non deliverable forwards and they are mostly for hedging purposes by banks. For example, a bank may give out fcy loans to an importer and if the importer is paying back lcy, they will hedge the position with a non deliverable forward.

einsteine:


You can't.

I am guessing you watched The Big Short recently.

There are no swaps traded in Nigeria and even globally, you can't trade CDS without an ISDA.

I am guessing you don't have an ISDA.

The only derivatives traded in Nigeria are simple warrants, FX options and non deliverable forwards and they are mostly for hedging purposes by banks. For example, a bank may give out fcy loans to an importer and if the importer is paying back lcy, they will hedge the position with a non deliverable forward.

You're right, I did watch the big short and I'm looking to see if there are options like that in Nigeria. Aren't there offshore financial markets that hedge foreign markets?

davien:
You're right, I did watch the big short and I'm looking to see if there are options like that in Nigeria. Aren't there offshore financial markets that hedge foreign markets?

You can buy credit default swaps on foreign markets through bulge bracket IBs as the market makers but they won't deal with you unless you have an ISDA agreement which comes with huge capital requirements.

Am a Novice my senior colleagues, please what's ISDA