Let's have a look at a very simple CDS transaction here. Alpha buys a two-year CDS from Beta on a notional amount of 100 on the three-year bonds issued by Charlie. So Charlie is the credit entity here. The CDS has an annual premium of 105 basis points and cash settlement. In this period, there is no credit event. What will be the cash inflows received by Beta over the term of the CDS contract? So the duration of this trade is, of course, two years. It's a two year CDS, so duration is two years. The premium here is 105 basis point, that equals 1.05% of course, and the notional in this case was 100. So how much premium does Beta receive over the term of this contract? Well, Beta receives 1.05% per annum for two years on the total notional of 100 here. So the total premium received by Beta over the term of the CDS contract is 2.1 in this case. There was no credit event here. So of course, in hindsight, Alpha bought the CDS without any real need.