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Related to swaption: Put swaption, Call swaption


An option giving the buyer the right to enter into a swap agreement by a specified date.

[Blend of swap and option.]


(Banking & Finance) another name for swap4
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References in periodicals archive ?
be a key participant in the city~s swaption team by assisting, participating in, and providing analytical support for presentations to the city commission.
13) A swaption is a promise to enter into an interest rate swap, and in this case, Merrill Lynch paid the county about $1.
Proceeds of the series 2013A refunding bonds will be used to current refund the series 2003D bonds and terminate the related swaption.
After listing payments in the millions that the MBTA makes to different banks for interest rate swaption agreements that went bad, the group shouted, "Cut off the banks.
A swaption is an option on a swap -- the right to put on a swap in three or five years," explains Bob Collie, Managing Director of Investment Strategy and Consulting at Russell Investments, Seattle.
In the case of swaption implied volatilities, US swaption markets can be temporarily affected by fluctuations in the activity financial institutions need to undertake to hedge their exposure to mortgage pre-payment risk.
An obvious example is a survivor swaption contract.
Bond proceeds will be used to refund a portion of the authority's outstanding debt and pay the required amount to terminate the 2005 Swaption Agreement.
The underlying cost of the risk absorbed by the swaption will be reflected in the rate that is fixed.
Ritchken, 2003, "Hedging in the Possible Presence of Unspanned Stochastic Volatility: Evidence from Swaption Markets", Journal of Finance, 58:2219-2248
A swaption gives the holder the right, but not the obligation, to buy or sell an underlying SS on specified terms.
A more recent development is what's known as a swaption, which is an option on an interest rate swap.