Is a company: no
Is a proper noun: no
Definition of Swap
- An agreement between two businesses to exchange commodities, payments or other financial products to reduce the risk of volatile market conditions or to obtain a better price or rate. For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate. A cross-currency swap enables two parties to enter into an agreement in which one exchanges its currency for the other's to meet their separate requirements.
Related Terms and Acronyms
- Loss — Definition,
- When expenses are larger than revenues.
- Trade Equity — Definition,
- A swap of property, such as real estate or a car, as part of a down payment for other real estate.
- Security — Definition,
- Property designated as collateral.
- A tradable financial implement that represents ownership, the rights to ownership or debt.
- A document stating ownership of a stock or bond.
- Collusion — Definition,
- A secret, deceitful agreement by two or more parties to defraud others.
- Profit — Definition,
- When revenues exceed expenses.
- Derivatives — Definition,
- Financial contracts whose value is derived from the value of some underlying asset, rate or index. Derivatives are used as risk-management tools by governments and corporations to reduce exposure to risk, mainly related to fluctuations in foreign-exchange and interest rates. Derivative instruments include swaps, options, futures and forward contracts and are used by banks in two principal activities: sales/trading and asset/liability management.
- Boot — Definition,
- Cash or other property used in an exchange to make the values of property traded equal. For instance, if you trade in a delivery truck on a new model, the cash you pay in addition to your old truck is boot.
- Stock — Definition,
- A share of the ownership of a company.
- Debt — Definition,
- Money one person or firm owes to another person or firm.
- Exchange — Definition,
- A trade of property for other property or services. Like-kind property exchanges are a popular tax-deferral strategy.
- Equity — Definition,
- The value of a property minus outstanding mortgage debt and other liens.
- Ownership in an asset.