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 ... 
Zero Coupon Inflation Swap
An exchange of cash flows that allows investors to reduce or ... 
Reverse Swap
An exchange of cash flow streams that undoes the effects of an ... 
Forward Swap
A swap agreement created through the synthesis of two swaps differing ... 
Bilateral Netting
The process of consolidating swap agreements between two parties ... 
Swap
A derivative contract through which two parties exchange financial ...

Investing
What's an Interest Rate Swap?
An interest rate swap is an exchange of future interest receipts. Essentially, one stream of future interest payments is exchanged for another, based on a specified principal amount. 
Investing
What Warren Buffet Calls "Weapons of Mass Destruction": Understanding the Swap Industry
A full analysis of how the swap industry works. 
Investing Basics
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Investopedia explores the most common types of swap contracts. 
Forex Education
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Find out what makes currency swaps unique and slightly more complicated than other types of swaps. 
Trading Strategies
Interest Rate Swaps Explained
Plain interest rate swaps that enable the parties involved to exchange fixed and floating cash flows. 
Investing
How To Read Interest Rate Swap Quotes
Puzzled by interest rate swap quotes terminology? Investopedia explains how to read the interest rate swap quotes 
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The Advantages Of Bond Swapping
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Forex Education
Hedging With Currency Swaps
The wrong currency movement can crush positive portfolio returns. Find out how to hedge against it. 
Trading Systems & Software
The FastPaced World of Libor & Fixed Income Arbitrage
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Retirement
What is a LumpSum Payment?
A lumpsum payment is a onetime payment for the total or partial value of an asset.

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 >> 
What are some risks a company takes when entering a currency swap?
Read about the risks associated with performing a currency swap, including counterparty credit risk in the event that one ... Read Answer >>