An option that confers to its holder the right to enter into a specific Type of swap Transaction at or by a pre-determined expiration date as either a payer or receiver of the fixed interest rate. Some types of swaption incorporate a forex component that can be used by a Hedger to protect a Series of cash flows in a currency other than their Domestic Currency.

Browse by Subjects

Related Terms

Put Swaption
Black's model
Call Swaption
See All Related Terms »

Popular Terms In Forex

Dollar Shortage
North American Free Trade Agreement
comprehensive insurance
absorption rate