What is a 'Zero Coupon Swap'
A zero coupon swap is an exchange of income streams in which the stream of floating interestrate payments is made periodically, as it would be in a plain vanilla swap, but the stream of fixedrate payments is made as one lumpsum payment when the swap reaches maturity instead of periodically over the life of the swap. The amount of the fixedrate payment is based on the swap's zero coupon rate.
BREAKING DOWN 'Zero Coupon Swap'
Variations of the zero coupon swap exist to meet different investment needs. A reverse zerocoupon swap pays the lumpsum payment when the contract is initiated, reducing credit risk for the payfloating party. An exchangeable zerocoupon swap can use an embedded option to turn the lumpsum payment into a series of payments. It is also possible for the floatingrate payments to be paid as a lump sum in a zerocoupon swap.

Asset Swap
Similar in structure to a plain vanilla swap, the key difference ... 
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Can bond traders trade on interest rate swaps?
Read about interest rate swaps and why these transactions are performed by institutional actors in the bond market, not individual ... Read Answer >> 
What would motivate an entity to enter into a swap agreement?
Learn why parties enter into swap agreements to hedge their risks, and understand how the different legs of a swap agreement ... Read Answer >> 
Do interest rate swaps trade on the open market?
Learn how interest rate swaps are traded on the OTC and interbank markets, and how these swaps can be used to arbitrage different ... Read Answer >> 
Can individual investors profit from interest rate swaps?
Find out how individual investors can speculate on interest rate movements through interest rate swaps by trading fixed rate ... Read Answer >> 
What are interest rate swaps on the OTC market?
Learn about interest rate swaps and how they are traded over the counter, and understand the impact of DoddFrank on swaps ... Read Answer >> 
When was the first swap agreement and why were swaps created?
Learn about the history of swap agreements, the first swap agreement between IBM and the World Bank, and how swaps have evolved ... Read Answer >>