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I am interested in Tranches on Credit Indexes.

Let $T$ be the trade date, let $t_1<T<t_2$ be the accrual dates surrounding the trade date.

I would like to know which option is correct ?

A) First coupon normal (so at $t_2$ protection buyer will pay a coupon on $\frac{t_2-t_1}{360}$) and protection seller pays accrued interest $\frac{T-t_1}{360}$ to protection buyer at trading date.

B) First coupon is short (so protection buyer will pay a coupon so at $t_2$, protection buyer will pay a coupon on $\frac{t_2-T}{360}$) and protection seller does not pay accrued interest.

C) First coupon is long (so protection buyer will pay a coupon at $t_3>t_2$ being the next accrual date and value is based on $\frac{t_3-T}{360}$) and protection seller does not pay accrued interest

D) something else I do not know.

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