exchanging securities for other securities of similar credit quality but of different terms in order to improve yields
Agreement between two or more parties to exchange the income of streams of two (or more securities) without exchanging the underlying securities.
Commonly used in physical gold markets to describe a transaction entered into with another party whereby gold in one location is 'swapped' for gold in another location. The cost of the swap implies theoretical shipping, insurance, and financing costs, and also reflects demand for metal in a particular location.
Exchanging one thing for another, and used in the financial arena e.g. currency swap, for trading purposes, or interest rate swap, where borrowers swap fixed rate for variable rate investments.
A portfolio of forward contracts. A swap is almost identical to a sequence of forward contracts (commitment to buy (long) or sell (short) an underlying asset at a prespecified price and time), and its close relative the future, at different maturity dates. One of the advantages of swaps is that a market maker can tailor a swap to fit the needs of a particular counterparty, whereas standardization is the key to the success of exchange-traded instruments.
Usually associated with speculative trading and high trading volumes. A swap that involves the exchange of principal and interest in one currency for the same in another currency. Currency Swaps were originally used to circumvent currency controls.
A derivative transaction between two counterparties who agree to exchange financial rates or prices for a fixed quantity of an underlying commodity, security, bond or currency. Energy swaps are typically purchased in order to manage the risk of delivering physical energy. For instance, a trader might pay a premium for a swap that exchanges the index price for January natural gas delivered to Transco zone 6 New York for the January NYMEX futures settlement price. This allows the trader to "lock in" the basis cost between gas delivered to the Henry Hub and gas delivered to New York at the premium paid for the swap. Swaps are financially settled transactions, meaning that traders exchange cash rather than physical energy when the final value of the swap is determined.
An arrangement that enables investors to make an exchange for their mutual benefit. For example, an interest rate swap allows one party to trade a floating interest rate for another party's fixed rate in order to take advantage of lower rates.
In the exchange markets, this is a simultaneous sale of a currency on the spot market together with a purchase of the same amount on the forward market. By combining these two transactions into a single one, transactions costs may be reduced. An arrangement between central banks whereby they each agree to lend their currency to the other.
Exchange of a portion of text with related, possibly opposite text. For example to exchange the keyword `guess' with `set' in a FEFFIT input file.
The exchange of one asset or liability for a similar asset or liability to lengthen or shorten maturities, raise or lower coupon rates or exchange fixed and variable payment streams.
exchanges the top two elements of the stack.
Simultaneous purchase and sale of electricity over a specified exchanging a fixed price for the floating pool price.
people looking to exchange or trade items with other scrapbookers in an organized fashion
A kind of financial transaction which has many variations, usually highly complex. They generally involve a simultaneous exchange of assets (the swap) by counterparties for other different assets of comparable value. The assets may be commodities or they may be financial instruments involving interest rates, cash flows, foreign exchange, debts or equities. In addition to financial profits, the swaps have many purposes such as limiting risks, overcoming restrictions in certain markets, or balancing portfolios.
(v.) To exchange two items. The term refers to swapping a section of real memory (contents) for a section of virtual memory.
Currency market transaction in which a spot market commitment (where payment and settlement is due within two days) is exchanged for a forward market commitment (in which payment and settlement is due at some specified future date). (Also see spot trade and forward trade.)
An agreement between two entities to exchange a stream of payments without transferring underlying debt. Interest Rate Swap is an agreement to exchange fixed interest payments for floating rate payments calculated for an agreed notional amount. There is no exchange of principal. By usage, fixed-rate payer has sold swap, floating-rate payer has bought swap. FX Swap is an agreement between two entities to exchange one currency for another at a forward exchange rate or at a sequence of forward rates. Unlike single-currency swaps, cross-currency swaps often require an exchange of principal (at inception at the prevailing spot rate and then re-exchanged at maturity at the initial spot rate).
Exchange of interest obligations (interest swap) and/or currency positions (currency swap).
Any transaction involving the exchange of one currency, obligation or financial instrument for another. Common examples include Interest Rate Swaps (IRS) and forward FX swaps.
Two parties agree to exchange obligations to make specified payment streams.
An arrangement in which two entities lend to each other on different terms, e.g., in different currencies, and/or at different interest rates, fixed or floating.
A small gift to exchange with other participants in a Wider Opportunity.
An exchange of streams of payments over time according to specified terms.
Swaps are a common type of weather derivative contract. Usually, no premium is exchanged. If the index is less than the strike then long pays short a payout based on the difference between the index and the strike, multiplied by the tick. If the index is above the strike then short pays long. Beyond a certain limit the magnitude of the payout stops increasing in either direction. The strike of a swap is typically set very near the mean value of the index. The level of the premium is influenced by the statistics of the index, and by the levels chosen for the tick, the strike and the limit. Typically the higher the tick, the higher the premium. (Note: in the terminology used in the financial derivatives markets, a weather Swap would be called a ‘future' or a ‘forward').
A swap is a contract where two parties agree to exchange their interest payment liabilities on an agreed amount of each others debt, for a fixed time period. There are two basic kinds of swap transaction; the single-currency swap and the cross-currency swap. A single-currency swap is an agreement between two parties to exchange the basis of servicing the interest cost on a common principal amount in the same currency. A cross-currency swap is an agreement between two parties to exchange the basis of servicing of interest cost in different currencies. It is important to recognise with cross-currency swaps that, in addition to exchanging interest rate cash flows or coupon payments on a bond, the principal is also swapped at maturity.
An exchange of one security for another to adjust a portfolio. A contract to exchange future periodic cash flows.
Exchange of a stream of payments over time agreed by two counter parties; normally used to transform market exposure from one interest rate base to another or one currency to another. see also currency swap Tap stock UK government bond used to control the gilt market. Supplies may be turned on or off, hence the name; only a proportion is issued initially, the remainder being fed into the market by the government broker.
an equal exchange; "we had no money so we had to live by barter"
exchange or give (something) in exchange for
a cash-settled OTC derivative under which two counterparties exchange two streams of cash flows
a contract between two parties in which the first party promises to make a payment to the second and the second party promises to make a payment to the first
a contract between two private parties that has the financial characteristics of a derivative
a contract by which two parties exchange the cashflow linked to a liability or an asset
a contractual agreement between two counter-parties to exchange a series of cash flows based on a notional amount
a contract whereby two counterparties agree to a periodic exchange of cash flows for a given period of time based of a specified notional amount of principal
a derivative instrument with which two parties periodically exchange payments based upon the value of one or more market indexes
a Derivative in the form of an agreement to exchange the return generated by one instrument for the return generated by another instrument
a flexible, private, forward-based contract or agreement, generally between two counter parties to exchange streams of cash flows based on an agreed-on (or notional) principal amount over a specified period of time in the future
a forward-based derivative
a group exchange of polymer clay items - beads , boxes, almost anything made of clay
a multi-period equivalent of a forward rate agreement with maturities of one year and beyond
an agreement between two parties to exchange cash flows for at certain period in the future
an agreement between two parties to exchange payments based on an agreed notional principal and interest rate
an agreement between two parties to exchange payments for a fixed period of time based upon a "notional principal
an agreement in terms of which the parties will exchange cash flows that are determined with reference to specific underlying reference assets for a specified period in the future
an agreement to exchange an agreed amount of one currency for another at a point in time and then reverse this transaction at another time in the future, at an agreed rate
an agreement to exchange a series of var
an agreement to exchange one payment stream for another, for a set period of time
an array of forward contracts -- a forward contract covering each date that settlement is to be made
an exchange of two currencies for a specific period and a reversal of that exchange at the end of the period consisting either of a combination of a spot and a forward leg or of two forward trades with different maturities
an illiquid version of a derivative
an organized exchange of resources amongst participants
a private agreement whose specifications, such as the maturity, can be customized to the needs of the two parties
a transaction that allows one party to exchange cash flows with another party
trade, an event popular amongst Internet members where a large group of artists simultaneously exchange pieces of a particular theme.
exchange programs, music or other data
a contract between two counter parties to exchange future cash flows in accordance with a specified formula for exchange.
An exchange transaction between two parties (eg. in the equity, currency or interest rate markets).
Exchange the positions of categories in rows and columns. For example, a FedScope report contains few rows but many columns that exceed the width of the printed page. You can swap the rows and columns to fit the report on one page.
An agreement where one party provides foreign exchange currency or local currency to another on one date while at the same time, entering into a contract to repurchase the currency on another date.
Generally, an exchange of payments between two parties (sometimes called: counterparties), directly or through an intermediary: currency, interest rate or stock.
a legal arrangement, the effect of which is that each of the parties (the counterparty) takes responsibility for a financial obligation incurred by the other counterparty. An interest rate swap exchanges floating interest payments for fixed interest payments or vice versa. A cross-currency swap exchanges principal and interest payments in one currency for cash flows in another currency.
The exchange of one bond or a group of bonds for another bond or group of bonds. Typically, swaps are done to take losses, but there are a number of other reasons including change of residence, change of tax status and to restructure portfolios.
Probably the most common type of OTC derivative. Involves the exchange of cashflows from two different investments over a set period of time. For example, a firm might swap floating rate debt payments for fixed rate over five years, thereby effectively turning a floating rate obligation into a fixed rate one.
An interest rate derivative contract in which two parties agree to make payments to one another over some period of time; the amounts of these future payments may be dependent on future market factors. The most common form of swap consists of one party making floating rate payments while the other makes fixed rate payments. Since the terms of the contract can be customized, swaps make ideal risk management tools.
Exchange of cash flows. Interest rate swap: Exchange of flows of interest payments denominated in the same currency but with different terms (e.g. fixed/variable rates). Interest rate/currency swap: Exchange of flows of interest payments and capital amounts denominated in different currencies.
An agreement between a hedger and a broker or bank to swap a series of forward cash flows based on selling and buying at an agreed pair of prices. These may be fixed (a known LME price) or floating (a yet-to-be-determined LME average price). The instrument originated in the banking business but is similar to an LME averaging agreement whereby a broker agrees to guarantee a hedger an average price for opening or liquidating a hedge.
An agreement to exchange two liabilities (or assets) and, after a prearranged length of time, to reexchange the liabilities (or assets).
A spot sale with a simultaneous equal forward purchase of equal tonnage. This is the definition of a gold or bullion swap which may differ from the term used by the foreign exchange markets.
A swap is a financial transaction in which two counterparties agree to exchange streams of payments occurring over time according to predetermined rules. Swaps are used, for liability management purposes, to change the currency and/or interest rate exposure associated with existing loans.
An interest rate swap is an agreement between two parties to exchange interest rate payments on a fixed (notional) amount of debt. In its standard (generic) form, one party to the swap agrees to pay a fixed interest rate in exchange for receiving a variable (floating) rate on the swap's notional amount. The reverse position is taken by the counterparty. Typically, the floating rate side of the swap is tied to the three or six month LIBOR (London Interbank Offer Rate).
The simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and lending another for the same period. However, any rate of return or cost of funds is expressed in the price differential between the two sides of the transaction.
an agreement whereby a floating price is exchanged for a fixed price over a specified period. It is an off-balance-sheet financial arrangement involving no transfer of physical energy – both parties settle their contractual obligations by means of a transfer of cash. The agreement defines the volume, duration and fixed reference price. Differences are settled in cash for specific periods – monthly, quarterly or six-monthly. Swaps are also known as contracts for differences and fixed-for-floating contracts.
Financial transaction in which the two parties agree to exchange a flow of interest and/or principal of a real or notional financing.
financial derivative that is an agreement between two parties to exchange payments over a fixed period. Currency swaps are used to restructure payment flows between various currencies. Interest-rate swaps are typically used to restructure payment flows between fixed and variable interest rates. Credit default swaps are used to exchange credit risk between two borrowers. The overall value of a swap is usually zero when the agreement is made, but may subsequently become positive or negative, depending on market developments in interest and exchange rates.
A spot purchase of foreign exchange, fixed or floating rate funds, or assets with simultaneous forward sale or vice versa.
A financial transaction in which each party to the contract agrees to exchange (swap) their respective payment obligations.
An exchange of payment streams between two counterparties. Swaps vary in terms of underlying securities, such as currency, interest rate, equity and commodity.
A Swap or Interest Rate Derivative is an exchange of cashflows between two parties. The cash flows are based on the interest payments made on a nominal sum known as the principal. The interest payments can be made at different rates, can be fixed or floating and can be made at different frequencies. A vanilla (or plain) swap normally involves exchanging fixed and floating rate payments on the same currency. See also Basis Swaps, Currency Swaps, Roller Coaster Swaps, Amortizing Swaps, Accreting Swaps and Asset Swaps.
Two companies exchange cash flow linked to a liability or asset
When two companies lend each other.
An agreement between two companies to exchange payment flows in the future. In an interest swap, a fixed interest rate is exchanged for a floating one for an agreed nominal amount.
In the most general sense, a contractual agreement between parties agreeing to the exchange of some good or service. In the financial world, swaps are often used as a means of hedging or reducing the risk of adverse price or rate changes. Among the most common form of swaps are interest rate swaps, whereby parties agree to the exchange of one stream of interest rate payments for another (most often the exchange of fixed-rate payments for floating-rate payments), and currency swaps, whereby parties agree to exchange payment streams denominated in different currencies. There are many variations on these basic instruments.
An exchange of one security for another block of similar market value. Swaps may be made to establish a tax loss, upgrade credit quality, extend or shorten maturity, etc.
An agreement between two parties to exchange a series of future payments. In a currency swap, the exchange of payments (cash flows) are in two currencies, one of which is often the US dollar
To exchange two items so that each appears where the other was originally.
A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
In general, the exchange of one asset or liability for a similar asset or liability for the purpose of lengthening or shortening maturities, or raising or lowering coupon rates, to maximize revenue or minimize financing costs.
Arrangement where two borrowers, one of whom has fixed interest and one of whom has floating rate borrowings, swap their commitments with each other. A bank would arrange the swap and charge a fee.
An OTC derivative under which two counterparties exchange two cash flow streams. swaption An option on a swap.
Generic type of currency exchange deal.
A transaction in which a bondholder can exchange floating interest-rate bonds for fixed interest rate bonds, change the currency in which interest is paid, or change the benchmark base for floating interest-rate issues.
In general, an arrangement whereby two parties lend to each other on different terms, e.g. in different currencies, and/or at different interest rates (fixed versus floating). (1) In a foreign currency swap, two parties exchange on the Spot market (usually at the prevailing spot rate) sums of money expressed in different currencies and these sums are re-exchanged forward. Fixed interest rates are also calculated on the swapped principal amounts. Foreign currency swaps are often used by Central Banks to support the domestic currency, through the swap of the domestic currency for a loan from another Central Bank.(2) An interest rate swap is an exchange, between two parties, of the cash flows from fixed rate as against floating rate investments, where the cash flows are usually in the same currency and where there is no exchange of principal. Français: Swap Español: Swap
An exchange transaction, for example, in equity, currency or interest rate, between two parties.
a derivative product used to hedge interest rate and currency exposure. Swaps involve an exchange of cash flows.
An interest rate, currency or equity exchange transaction involving two parties. In the case of an interest rate swap, one party is obliged to pay a fixed interest rate to the other party in return for a floating interest rate. In the case of a currency swap, one party is obliged to make payments in another specified currency.
See on: Wikipedia Investopedia Traditionally, the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. Recently, swaps have grown to include currency swaps and interest rate swaps.
Exchange one security for another. A swap maybe executed to change the maturities of a bond portfolio or the quality of the issues in a stock of bond portfolio, or because investments objectives have sifted. Investors with bond portfolio often swap for other higher-yielding bonds to be able to increase the return on their portfolio and realize tax losses.
A forward type of contractual agreement to exchange one type of cash flow or asset for another, according to predetermined rules.
An agreement between two parties to exchange (or swap), under specified conditions, a set of cash flows at a future point in time.
A financial transaction between two parties, often involving a banking intermediary, to exchange given streams of financial flows.
Transaction in which a price for a certain period is exchanged for another price. This is usually a purely financial transaction involving no physical delivery. The contract must precisely specify the term, the underlying quantity and the prices. Price differences are compensated monthly, quarterly or biannually in cash for previously agreed periods. In classical fixed-for-floating swaps (also called plain vanilla swaps), a variable price is exchanged for a fixed price. There are also floating-for-floating swaps, in which a variable price is exchanged for another variable price.
The exchange of one bond for another. Generally, the act of selling a bond to establish an income tax loss and replacing the bond with a new item of comparable value.
Purchase of a currency in return for another currency on a given future date and simultaneous repurchase of the currency from the same counter-party at a different maturity. The delivery date is normally the same as for spot transactions.
An arrangement between the central banks of two countries for standby credit to facilitate the exchange of each other's currencies.
A custom-tailored, individually negotiated transaction designed to manage financial risk, usually over a period of one to 12 years. Swaps can be conducted directly by two counterparties, or through a third party such as a bank or brokerage house. The writer of the swap, such as a bank or brokerage house, may elect to assume the risk itself, or manage its own market exposure on an exchange. Swap transactions include interest rate swaps, currency swaps, and price swaps for commodities, including energy and metals. In a typical commodity or price swap, parties exchange payments based on changes in the price of a commodity or a market index, while fixing the price they effectively pay for the physical commodity. The transaction enables each party to manage exposure to commodity prices or index values. Settlements are usually made in cash.
An arrangement when two companies lend to one another on different terms, for example at different interest rates or in different currencies.
A derivative whereby two parties exchange cash flow streams.
A type of derivative instrument.
The simultaneous buying and selling of the same amount of a given currency for two different dates, against the purchase and sale of another currency.
When a trader exchanges one currency for another, holding it for only a short period. Swaps are typically used to speculate on interest rate movements. It is calculated using the interest differentials between the two currencies.
A non-standardized, individually negotiated contract between two parties that trades outside of an organized exchange in the Over-the-Counter market. It is a purely financial contract that involves the exchange of money, not physical commodities. A swap is almost identical to forward contracts (commitment to buy (long) or sell (short) an underlying asset at a specified price and time).
An agreement between two businesses to exchange commodities, payments or other financial products to reduce the risk of volatile market conditions or to obtain a better price or rate. For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate. A cross-currency swap enables two parties to enter into an agreement in which one exchanges its currency for the other's to meet their separate requirements.
A financial risk-management tool in which two parties exchange differing market risk exposures in order to be assured of a fixed or predictable price, usually for an extended period of years. It may also involve short-term instruments in which risk is managed by the swaps provider rather than absorbed by a counterpart.