Exchange of interest obligations between two parties, either fixed to floating rate, or vice versa, or a given notional period for an agreed time period. Currency swaps exchange interest flows in two currencies, and also include an exchange of principals in the two currencies.
A swap transaction is the combination of a cash transaction and a forward transaction in opposite directions carried out with the same counterparty. There are two types of transaction possible: A cash purchase of a currency linked with a forward sale of the same currency against another A cash sale of a currency linked to a forward purchase of the same currency against another. The swap points added (premium) or deducted \(discount) to the cash exchange rate of the first part of the transaction, represent the interest differential over a specifiied period (due date of the swap) of the two currencies involved.
Contractual agreements between two parties to exchange a series of cash flows. For interest rate swaps, counterparties generally exchange fixed and floating rate interest payments based on a notional value in a single currency. For cross-currency interest rate swaps, principal amounts and fixed and floating rate interest payments are exchanged in different currencies.
Over-the-counter derivatives that obligate the parties to exchange the financial returns from one asset or index for those of another at a specified rate of exchange over a pre-determined period of time. T-Bills Short-term government debt. Instead of paying interest, treasury bills are sold at a discount to reflect short-term interest rates. The difference between the purchase price and proceeds at maturity represents interest income.
Contracts that involve the exchange of fixed and floating interest rate payment obligations and/or currencies on a notional principal for a specified period of time.
A swap occurs when one currency is temporarily exchanged for another, then the currency is held and exchanged later after a fixed period of time. To calculate the swap take the interest rate differential between the two underlying currencies, thus it may be used for speculative purposes to exploit anticipated movement in the interest rates.
The simultaneous buying, selling or exchange of one security for another among investors to change maturities in a bond portfolio, for example, or because investment goals have changed.
opportunity to change key terms of a financing transaction, in pre-defined circumstances, e.g. interest rates, currency used for repayment, maturity of the loan, etc.
The exchange of cash flow from one currency to another at a specified amount, exchange rate and future date.
The international donors write off national debt in exchange for certain kinds of budget reallocations to support sectors or activities that meet the international agenda.
Derivative contracts whereby two companies agree to exchange cash flows based on different underlying reference assets. The most common swaps are interest rate swaps, where fixed coupon cash flows are exchanged for floating-rate cash flows. Total return swaps can be structured on just about any underlying reference asset or index, for example S&P 500 Equity Index vs. J.P. Morgan EMBI+ Index.
Agreements between at least two counter-parties to exchange cash flows in the future according to a pre-specified formula. They can therefore be regarded as portfolios of forward contracts. The most common one is an agreement on the exchange of a fixed rate for a floating rate contract.
A foreign exchange swap is a trade that combines both a spot and a forward transaction into one deal, or two forward trades with different maturity dates.
A private agreement between two counterparties who agree to exchange cash flows based on a notional amount tied to a floating index, in exchange for cash flows based on the same notional amount tied to a fixed index. Swaps are normally traded in OTC markets and can have tailored terms and conditions with performance risk assumed by the involved parties.
An exchange among a group of quilters of either fabric or blocks with some set ground rules as to theme, color, design, etc. Popular in Quilting Guilds, but also a very popular online activity on quilting forums and mailing lists. Also see Round Robin Swap.
A contract between two parties to make a cash flow exchange now or at a point in the future. The two borrowers agree to pay the interest on each other's debt; under a currency swap, they may also repay the capital.