A CDS is an insurance contract, where owner doesn’t need to own the property being insured. Owner must pay the amount in quarterly installments to seller. If there is a (arbitrated) credit event for any US bond maturity, the owner can get 100% of original value of bond when he gives the CDS seller the bond.

Probability is more complex than headline, but should actually be considered 0. US government will stop all other payments before defaulting temporarily, and mint a $1T platinum coin with everyone’s favorite president on its head.

But the 2% gain as a minimum is also unlikely. CDS will pay the full $100 of original bond, and a stress that includes even a minor credit event, will also send prices down and yields skyrocketing, and so far more than any extra 2% hit from a temporary default is to be gained.

Business schools will have told you that superpower CDS should always be 0, because it is defined as the risk free rate.