[swedishturnip]

Some participants speculate, others hedge an actual risk, yet others “reinsure” the risk (in insurance terms) to earn a premium - there are all kinds.

And yes it would be quite rare for a CDS not to be traded under a collateral agreement - in fact most these days are cleared (and as the case may be, netted) with a central counterparty to minimize a web of counterparty risk that might otherwise be problematic.