Lehman Brothers Holdings Inc. (NYSE: LEH) stock has lost 45% of its value in early trading, it has rebounded somewhat since and was only down 30% by midday trading. It fell 7% on Wednesday and 45% on Tuesday. Now the price of insuring its bonds is hitting new records. Can it last the week?

Bloomberg News reports that the price of Lehman's so-called credit-default swaps (CDSs) -- a kind of bondholder insurance -- is hitting record levels and requiring an unusual upfront payment. "Contracts protecting $10 million of Lehman debt for one year cost 11 percent upfront and 5 percent a year, according to CMA prices at 8:50 a.m. in New York. That's up from 1,200 basis points at the close of trading yesterday. The price means it costs $1.1 million in advance and $500,000 a year to protect the bonds compared with $1.2 million a year yesterday," according to Bloomberg.

It's worth understanding CDSs because their rates are more sensitive indicators of a troubled company's financial health than its financial statements, which are often full of unstated assumptions designed to make things look better than they really are. "Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality; a decline, the opposite," writes Bloomberg.