Equity default swap (EDS) - Financial definition
Concise definition of the term equity default swap
An equity default swap is an equity contract that is designed to provide protection for the investor from price changes to specific reference equity and have been modeled after credit default swaps. Payment for an EDS is triggered by an equity event, which is if the price of the reference equity falls below a vertain threshold expressed as a percentage of the notional during the life of the EDS.