CDX indices hit by equity sell-off
Credit derivatives indices widened dramatically yesterday, hit by fallout from the plummeting equity markets.
The CDX.IG widened 29.8% from Monday to Tuesday’s close on February 27, after the Dow Jones Industrial Average dropped 500 points – its largest daily drop since the 9/11 attacks. The crossover and high-volatility indices were also hit, although less so than investment grade.
“That’s probably because [investment grade] is still very inexpensive, so there was a proliferation of hedging to
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