Equity Swap

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Dictionary Says

Definition of 'Equity Swap'

An exchange of cash flows between two parties that allows each party to diversify its income, while still holding its original assets. The two sets of nominally equal cash flows are exchanged as per the terms of the swap, which may involve an equity-based cash flow (such as from a stock asset) that is traded for a fixed-income cash flow (such as a benchmark rate), but this is not necessarily the case. Besides diversification and tax benefits, equity swaps also allow large institutions to hedge specific assets or positions in their portfolios.
Investopedia Says

Investopedia explains 'Equity Swap'

Most equity swaps today are conducted between large financing firms such as auto financiers, investment banks and capital lending institutions. LIBOR rates are a common benchmark for the fixed income portion of equity swaps, which also tend to be held at intervals of one year or less, much like commercial paper.
Search results for

'Equity Swap'

  • What is a debt/equity swap?

    http://www.investopedia.com/ask/answers/06/debtequityswap.asp
    ... Feedback Feedback. What is a debt/equity swap? ... A debt/equity swap works the opposite
    way: debt is exchanged for a predetermined amount of equity (or stock). ...

  • An In-Depth Look At The Swap Market

    http://www.investopedia.com/articles/trading/11/introduction-swap-market.asp
    ... Check out Currency Swap Basics.); Equity Swap An equity swap is similar to an interest
    rate swap; however, in an equity swap rather than one leg being the "fixed ...

  • CFA Level 1 Study Guide - Derivatives - Interest Rate and Equity ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/interest-rate-equity-swaps.asp
    Learn the components of plain vanilla interest rate swaps and equity swaps. Contains
    sample calculations finding the payments for each swap. ...

  • 5 Equity Derivatives And How They Work

    http://www.investopedia.com/articles/optioninvestor/10/equity-derivatives.asp
    ... An alternative is to use the equity index swap. The manager can arrange for an S&P
    500 swap, paying for the swap on an agreed upon interest rate. ...

  • Starbucks Stock Swap: Happy Baristas Means Happy Investors ...

    http://financialedge.investopedia.com/financial-edge/0609/Starbucks-Stock-Swap-Happy-Baristas-Means-Happy-Investors.aspx
    ... What does the employee stock swap mean to investors ... key component of our incentive
    and retention programs because we believe that equity compensation encourages ...

  • What is a "gypsy swap"?

    http://www.investopedia.com/ask/answers/08/gypsy-swap.asp
    ... respects, a gypsy swap is similar to a rights offering, except that the restricted
    party's equity claim does not elapse and the swap instantly becomes dilutive ...

  • How can I use an "airbag swap"?

    http://www.investopedia.com/ask/answers/08/airbag-swap.asp
    ... In case you're wondering why a company would enter into this type of swap agreement
    knowing that the ... Read More ยป. Bank Rates. Savings; Home Equity; Mortgage; Auto ...

  • Financial Statements: Long-Term Liabilities | Investopedia

    http://www.investopedia.com/university/financialstatements/financialstatements8.asp
    ... below). Say on the right-hand side we perform a simple debt-for-equity swap. ...
    Our debt-for-equity swap actually causes EPS to increase! What ...

  • CFA Level 1 Study Guide - Derivatives - Swap Markets and Contracts ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/swap-markets-contracts.asp
    ... 15.35 Effect of Cash Flows on Put-Call Parity and the Lower Bounds; 15.36 Swap Markets
    and Contracts; 15.37 Currency Swaps; 15.38 Interest Rate and Equity Swaps

  • Debt Exchanges Are The Latest Push

    http://stocks.investopedia.com/stock-analysis/2009/Debt-Exchanges-Are-The-Latest-Push-F-FLIR-MGM-ABH0403.aspx
    ... America. For further reading on debt exchanges, see the answer to our
    frequently asked question, What is a debt/equity swap? By ...

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