I'll preface this by saying that I work in electronic trading, so I have a dog in this hunt and my opinion should thus be viewed with some suspicion. You make

I'll preface this by saying that I work in electronic trading, so I have a dog in this hunt and my opinion should thus be viewed with some suspicion. You make two points in the two posts that are related: The key point that is missed in all this imprecision -- is that CDS derivatives markets are not like other derivatives markets -- which are regulated. They are contracts that occur between large financial institutions only. That is the 'secret'. The rest is just the equivalent of a high school tourist at the visitor's desk. Eventually these contracts became standardized -- they referred to the same # of bushels, and they were backed by clearing firms and central clearing houses at the exchange In the current state of affairs, the CDS market is not transparent and the participants who want to avoid transparency point to the custom nature of the contracts as a reason that they shouldn't be quoted electronically. However, this situation is similar to what existed in equity/index options before the products started to be listed by exchanges: customized contracts were traded through brokers. This sort of OTC trading still occurs, but it exists alongside a very large, very active market of exchange-traded options whose prices are very transparent and thus automatically force down the fees that can be charged in the OTC market because they provide publicly available pricing information on similar contracts. If electronic exchanges were to create standardized contract terms for CDSs targeting some of the more heavily traded debt instruments (sovereign debt be a good target at this point for obvious reasons) and then list these contracts electronically, I suspect that this would bring a great deal of transparency to the pricing of these products due to the participation of firms like Citadel (which already has a large and profitable group making markets in electronically traded options). Large players have resisted such transparency in the fixed income markets for years, and this seems no different.