Default seems unlikely, unless the market moves very quickly, since anyone pursuing this strategy is likely to be very small compared to the market for the S&P 500.
(Also consider that these pay out in a scenario where the world gets much richer — in contrast to e.g. Michael Burry’s “Big Short” swaps, which paid out in a scenario where the market was way down — so you’re just skimming a little off the huge profits that others are making, rather than trying to get them to pay you at the same time they’re realizing other losses.)
Default seems unlikely, unless the market moves very quickly, since anyone pursuing this strategy is likely to be very small compared to the market for the S&P 500.
(Also consider that these pay out in a scenario where the world gets much richer — in contrast to e.g. Michael Burry’s “Big Short” swaps, which paid out in a scenario where the market was way down — so you’re just skimming a little off the huge profits that others are making, rather than trying to get them to pay you at the same time they’re realizing other losses.)