CDS vs Options Trading

This problem tests whether you can distinguish between market instruments that express a view on different types of risk. It focuses on the core idea that options are tied to expectations about equity price movement, while CDS instruments are tied to expectations about credit quality and default risk. Interviewers ask this because sales and trading candidates need to show they understand what each product is really pricing, how traders think about the underlying exposure, and how hedging or speculation differs across asset classes.