Three U.S. options and futures exchanges have launched listed products aiming to grab shares of the burgeoning credit-derivatives market, although the new products are facing short-term hurdles and may encounter long-term ones as well.

The most common credit derivatives, typically over-the-counter financial products brokered between counterparties by dealers, are credit default swaps (CDS). They are highly customized and designed to hedge the risks of specific credits and sometimes the indices of credits, including bond issues and commercial loans as well as credit instruments that have been wrapped into securities and sold through vehicles such as collateralized debt obligations (CDOs).

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