Friday, March 06, 2009

Intercontinental Exchange Gets Greenlight to sell CDOs

It seems that the $27 trillion dollar CDO market might finally go from the darkness to the light.

“Trading will be much easier,” he said. “We’ll see new players come to the market because they’ll like the idea of this being a better and more traded product. We also feel like over time we’ll see the creation of different types of products.”

Intercontinental plans to begin backing trades in the $27 trillion market on March 9, according to a company statement today.

Hopefully, it gets that market going again and provides some added liquidity for banks. It also gives an investor another avenue to hedge their position since they can buy the CDOs on a company's debt which goes up in price if the risk of failure in the company rises.

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