Swap Spread

AAA

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.

RELATED TERMS
  1. Swap Dealer

    An individual who acts as the counterparty in a swap agreement ...
  2. Quality Spread Differential - QSD

    In an interest rate swap, the difference between the interest ...
  3. Swap

    Traditionally, the exchange of one security for another to change ...
  4. Spread

    1. The difference between the bid and the ask price of a security ...
  5. Cash-And-Carry Trade

    A trading strategy in which an investor buys a long position ...
  6. ISDA Master Agreement

    A standard agreement used in over-the-counter derivatives transactions.
Related Articles
  1. The Basics Of The Bid-Ask Spread
    Investing Basics

    The Basics Of The Bid-Ask Spread

  2. Trading The QQQQ With In-The-Money Put ...
    Options & Futures

    Trading The QQQQ With In-The-Money Put ...

  3. Bond Spreads: A Leading Indicator For ...
    Options & Futures

    Bond Spreads: A Leading Indicator For ...

  4. How is spread calculated when trading ...
    Trading Strategies

    How is spread calculated when trading ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center