Swap

Dictionary Says

Definition of 'Swap'

Traditionally, the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. Recently, swaps have grown to include currency swaps and interest rate swaps.
Investopedia Says

Investopedia explains 'Swap'

If firms in separate countries have comparative advantages on interest rates, then a swap could benefit both firms. For example, one firm may have a lower fixed interest rate, while another has access to a lower floating interest rate. These firms could swap to take advantage of the lower rates.

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Related Definitions

  1. Basis Rate Swap

    A type of swap ...
  2. Overnight Index Swap

    An interest rate ...
  3. Credit Default Swap - CDS

    A swap designed ...
  4. Commodity Swap

    A swap in which ...
  5. Currency Swap

    A swap that ...
  6. Bond Swap

    Selling one debt ...
  7. Non-Deliverable Swap - NDS

    A swap that is ...
  8. Catastrophe Swap

    A customizable ...
  9. Substitution Swap

    An exchange that ...
  10. Swap Dealer

    An individual ...

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