Spreadlock

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Dictionary Says

Definition of 'Spreadlock'

An agreement that fixes the spread between the forward price of an interest rate swap and its underlying government bond yield.
Investopedia Says

Investopedia explains 'Spreadlock'

The spreadlock allows a future user of an interest rate swap to take advantage of the current spread between the swap rate and the bond rate. This is achieved by transferring the current savings in basis points to a date in the future, when they will enter the interest rate swap.

Related Definitions

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    Basis Point - BPS

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity ...
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  • Exotic Option

    An option that differs from common American or European options in terms of the underlying asset or the calculation of how or when the investor receives a certain payoff. These options ...
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  • Forward Price

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