• An option on an interest-rate swap.
• Options on interest rate swaps. The buyer of a swaption has the right to enter into an interest rateswap 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 thecounterparty to the swap if the buyer exercises.
• Is an option on a swap. This option can be a put, call or myriad combination of option features.
Follow this link for all the terms related to swap.
| ||Embedded terms in definition|
Interest rate swap
| ||Referenced Terms|
| ||Call swaption: A Swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The writer therefore becomes the fixed-rate receiver/floating rate payer.|
| ||Put swaption: A financial tool in which the buyer has the right, or option, to enter into a swap as a floating-rate payer. The writer of the Swaption therefore becomes the floating-rate receiver/fixed-rate payer.|
| ||Swap option: See: Swaption. Related: Quality option.|
| ||Related Terms|
| ||Call swaption|