Here's an example of two counterparties having traded a CDS and there is later a credit event. So originally, Birkdale Capital bought insurance from Augusta Inc. On a notion of $10 million on the reference bond of Murfield Plc. The premium was 55 bits per annum, and the term was one year. However, here in day two, disaster strikes and Murfield Plc defaults on day two. Consequently, the bonds are now trading at 0 cents on the dollar. This is admittedly an extreme example and Augusta Inc pays out on the CDS protection they sold. So what are the net cash flows here? Well, of course, first of all Birkdale still has to pay the insurance premium throughout the whole year, which is $55,000. However, there is now a massive payout on the CDS. A hundred percent of $10 million. So $10 million total, is what Birkdale will receive from Augusta. This of course, results in a net profit to Birkdale of $9,945,000.