Rollercoaster Swap


DEFINITION of 'Rollercoaster Swap'

A seasonal swap providing flexibility of payments at predetermined periods to best meet the counterparty's cyclical financing needs or other requirements.

BREAKING DOWN 'Rollercoaster Swap'

This swap has fluctuating payments so that the counterparty can match cash flows to transfers, periodic financing obligations or seasonal factors.

For example, an international company that sells lawn mowers might have a keen interest in a rollercoaster swap because it can match swap payments with the seasonal demand for lawn mowers.

  1. Swap

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  2. Replacement Swap

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  3. Accreting Principal Swap

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  4. Index Amortizing Swap - IAS

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  1. How do I use a rollercoaster swap?

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  3. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  4. How do futures contracts roll over?

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  5. Why do companies enter into futures contracts?

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