Swap
/swɒp/
Definitions
- (n.) A financial agreement to exchange cash flows or liabilities between parties.
The two companies entered into an interest rate swap to manage their loan payments.
- (v.) To exchange one asset, right, or obligation for another by mutual agreement.
They agreed to swap shares of stock at the specified valuation.
Forms
- swaps
- swapped
- swapping
Related terms
See also
Commentary
Swaps are primarily used in finance to manage risk and optimize cash flows; precise terms should be clearly outlined in the contract to avoid ambiguity.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.