Blue Chip Swap

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DEFINITION of 'Blue Chip Swap'

When a domestic investor purchases a foreign asset and then transfers that asset to a domestic bank branch located offshore. Then, the funds from the foreign asset are transfered into a bank account in the domestic country. The domestic investor usually has a partner transferring assets to the foreign branch on his or her behalf.

INVESTOPEDIA EXPLAINS 'Blue Chip Swap'

Blue chip swaps, which were performed in Brazil during the late '90s, were a result of a law that reduced the amount of capital inflow into the country. The law prohibited direct foreign investments in the country's derivative markets, but blue chip swaps allowed this type of investment to continue.

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RELATED FAQS
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    Swap agreements originated from agreements created in Great Britain in the 1970s to circumvent foreign exchange controls ... Read Full Answer >>
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    Large-cap stocks are a superior investment option for retirement portfolios compared to penny stocks. Most penny stocks are ... Read Full Answer >>
  4. Is it more beneficial to invest in a blue chip stock or a penny stock?

    Penny and blue-chip are terms used to describe a stock's valuations and statures. Penny stocks are generally the stocks of ... Read Full Answer >>
  5. How can I calculate the forward p/e of the S&P 500?

    Forward price-to-earnings, or P/E, for the S&P 500 is calculated by dividing the market share per price by the forecasted ... Read Full Answer >>
  6. How are swap agreements financed?

    Since swap agreements involve the exchange of future cash flows and are initially set at zero, there is no real financing ... Read Full Answer >>
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