Swap Spread

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DEFINITION of 'Swap Spread'

1. The difference between the negotiated and fixed rate of a swap. The spread is determined by characteristics of market supply and creditor worthiness.

2. The difference between the swap rate and the lending rate offered through other investment vehicles with comparable characteristics.

INVESTOPEDIA EXPLAINS 'Swap Spread'

Similar to equity spreads, the swap spread adjusts for every contract and the different participating parties.

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RELATED FAQS
  1. How is spread calculated when trading in the forex market?

    First, remember that in the forex markets investors trade one currency for another. Therefore, currencies are quoted in terms ...
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