locking in known profits and preventing physical settlement rather than risking an unknown underlying close benchmark, and the administration is required to exercise (or be assigned on) and settle options in-the-money.
Going further, many credit traders will use credit default swaps to express a bearish view on a company’s creditworthiness. They’re similar to options, except the buyer of the contract makes regular payments to the seller of the contract in exchange for protection, rather than a fixed, upfr...