What does Asset Backed Credit Default Swap - ABCDS mean?
A Credit Default Swap (CDS) on structured securities ‘Asset Backed Securities’. ABSCDS is generally traded between institutional investors and dealers. The asset under reference is an asset backed security and not a corporate credit instrument. A pool of mortgages may be sold as one instrument.
Futures Knowledge Explains Asset Backed Credit Default Swap - ABCDS
An asset-backed credit default swap is a credit default swap with obligation linked to an asset-backed security. It transfers the credit default risk from an ABS. The buyer of ABCDS pays some premium to the protection seller and gets protection for defaults on asset-backed securities.