This intuitive, rigorous overview links the practices valuing and trading credit derivatives with academic theory. Rather than presenting highly technical explorations, it offers summaries of major subjects and the principal perspectives associated with them. Its centerpiece is pricing and valuation issues, especially valuation tools and their uses in credit models. Five new chapters cover practices that have become commonplace as a result of the crisis, including standardized premiums and up-front payments. The analyses of regulatory responses to the crisis (Basel III, Dodd Frank, etc) for the credit derivatives market include all the necessary statistical and mathematical background for readers to easily follow the pricing parts. Every reader who is familiar with mid-level mathematics and who wants to understand the functioning of the derivatives markets (both on the practice and academic side) can fully satisfy his or her interests with Understanding Credit Derivatives and Related Instruments.