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Definition of 'Swaption (Swap Option)'
The option to enter into an interest rate swap. In exchange for an option premium, the buyer gains the right but not the obligation to enter into a specified swap agreement with the issuer on a specified future date.
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Investopedia explains 'Swaption (Swap Option)'
The agreement will specify whether the buyer of the swaption will be a fixed-rate receiver (like a call option on a bond) or a fixed-rate payer (like a put option on a bond).
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Search results for 'Swaption (Swap Option)'
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http://www.investopedia.com/ask/answers/08/bermuda-swaption.asp
The Bermuda swaption refers to a modified American style of option. A swaption is
an option on an interest rate swap in which the buyer has the. ...
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http://www.investopedia.com/articles/optioninvestor/08/manage-interest-rate-risk.asp
... In general, a cap is like a call and a floor is like a put. Swaptions A swaption,
or swap option, is simply an option to enter into a swap. ...
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http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/swap-markets-contracts.asp
... 15.33 Option Prices and the Time to Expiration; 15.34 Put-Call Parity; 15.35 Effect
of Cash Flows on Put-Call Parity and the Lower Bounds; 15.36 Swap Markets and ...
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http://www.investopedia.com/articles/optioninvestor/07/swaps.asp
... As with Strategy 1, this requires the permission of the counterparty. 4. Use
a Swaption: A swaption is an option on a swap. Purchasing ...
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http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/what-is-a-derivative.asp
... 15.33 Option Prices and the Time to Expiration; 15.34 Put-Call Parity; 15.35 Effect
of Cash Flows on Put-Call Parity and the Lower Bounds; 15.36 Swap Markets and ...
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http://www.investopedia.com/articles/optioninvestor/10/derivatives-101.asp
... through option strategies. A swaption gives the owner the right but not
the obligation (like an option) to enter into the swap. ...
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