Swaps and Swap Derivatives

The swap in its simplest form can be described as a periodic exchange (or ‘swap’) of payments between two counterparties for a specified period of time; the exchange is generally based on interest rates, currency rates or commodity prices. The actual exchange of payments is governed by a contractual agreement between the participants and is reflected as an off-balance sheet exposure. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.