Swap assignment
Related: swap sale.
Swap buy-back
The sale of an interest rate swap by one counterparty to the other, effectively
ending the swap.
Swap fund
See: Exchange fund
Swap option
See: Swaption. Related: Quality option.
Swap rate
The difference between spot and forward rates expressed in points, e.g., $0.0001
per pound sterling.
Swap reversal
An interest rate swap designed to end a counterpartys role in another interest
rate swap, accomplished by counterbalancing the original swap in maturity,
reference rate, and notional amount.
Swap sale
Also called a swap assignment, a transaction that ends one counterpartys role in
an interest rate swap by substituting a new counterparty whose credit is
acceptable to the other original counterparty.
Swaption
Options on interest rate swaps. The buyer of a swaption has the right to enter
into an interest rate swap agreement by some specified date in the future. The
swaption agreement will specify whether the buyer of the swaption will be a fixed-
rate receiver or a fixed-rate payer. The writer of the swaption becomes the
counterparty to the swap if the buyer exercises.
Sweep account
