if there is prediction of weaker economy and widening of spreads, high yield spread widening more than investment grade.
Then why would we buy CDS protection on high yield and sell CDS protection on investment grade instead of only buying CDS protection on high yield.
What is rationale of taking 2 positions by selling protection on investment grade when we predict of spread widening (even though less than high yield one)
Lower cost.
Same reason for an equity collar instead of just a protective put.