Traders are ramping up bets against artificial intelligence (AI) darling Oracle by buying financial instruments intended to protect them in the event of a default. The price of Oracle’s credit-default swaps (CDS), financial instruments used to guard against potential non-payment of debts, has spiked in recent weeks to its highest level in three years. However, they can also be used by traders to manage risk or bet against a particular company, given that the instruments pay out if a business defaults. Investors have traded more than $5bn (£3.8bn) in these swaps since September, according to Jigar Patel, a Barclays analyst. “Oracle stands out dramatically,” Mr Reid said in a note to clients this week.
