Call swaption - Definition

Also known as call swap Option or payer Swaption, it is an option in which the buyer of the option has the right to enter into to an Interest Rate Swap as the fixed-rate payer. It is an exchange in which the buyer pays an option Premium and gains the opportunity to enter into a specified swap agreement with the issuer on a specified future date as a fixed-rate receiver. A swaption is useful if an interest rate swap may be useful for the buyer's Investment strategy, but there is still some uncertainty as to whether that will be the case.

The comparable instrument in currency trading is a Currency Swap where the interest paid is also agreed upon.

Terms near "Call swaption"

Callable bond
Callable loan
Callable stock
Called away
Called bond
Cambodia Riel
Cameroon Franc
Canadian Dollar
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