“You can buy CDSs without owning the underlying bond, which is essentially a speculation that McDonald’s will default on that bond.  Unless, of course, you have influence over the fast-food giant’s management. Then it’s not a speculation at all. It’s a can’t-lose trade.  That’s what Blackstone did. It took out an insurance policy on Codere, persuaded it to default, then collected $15.6 million in payouts. There was never a chance Blackstone would lose money on this arrangement. It was literally a risk-free trade.”

http://www.caseyresearch.com/cdd/how-to-make-15.6-million-risk-free

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