A Credit Default Swap (CDS) Calculator is a financial tool used to estimate the cost and potential payout of a credit default swap contract. It helps investors and risk managers assess the premium payments, notional value, and potential losses in case of a credit event, such as a borrower’s default.

By inputting key variables like the notional amount, credit spread, recovery rate, and contract duration, users can determine the fair value of a CDS contract and analyze risk exposure. This tool is particularly useful for hedge funds, banks, and financial analysts managing credit risk.

A CDS Calculator simplifies complex financial calculations, providing insights into credit risk pricing and potential returns. By adjusting different inputs, investors can compare multiple scenarios and make informed decisions regarding credit protection strategies.