Swaption

(redirected from Swaptions)
Also found in: Dictionary, Wikipedia.
Related to Swaptions: Interest rate swap, swaps

Swaption

Options on interest rate swaps. The buyer of a swaption has the right to enter into an interest rate swap 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 the counterparty to the swap if the buyer exercises.

Swaption

An option in which the buyer of the option has the right to enter into to an interest rate swap. The terms of the swaption specify whether the buyer will be the payer of the floating rate or the payer of the fixed rate. It is called a swaption because it is an option on a swap. A swaption is useful if an interest rate swap may be useful for the buyer's investment strategy, but there is still some uncertainty as to whether that will be the case. See also: Call swaption, Put swaption, Plain vanilla swap.

swaption

An option taken on an interest-rate swap. A swaption buyer has the right to enter into an interest-rate swap agreement by a specified date.
References in periodicals archive ?
3 million associated with its interest rate swaps and swaptions economically hedging its repurchase agreements; an unrealized loss, net of tax, of $5.
Swaption Volatility Cube (volatility cubes and surfaces with multi-curves)
3 billion of payer swaptions from previous quarters expired, resulting in a net realized gain of $3 million.
A portion of bond proceeds will be used to fund all or the majority of the termination of the swaptions, improving TBW's generally manageable debt profile.
Unrealized (gain) loss, net of tax, on interest rate swap and swaptions economically hedging repurchase agreements and available-for-sale securities
Maintaining a solid liquidity position becomes especially important if the swaptions are executed.
The Company enters into interest rate swaps with the intention of protecting its net book value and longer term earnings potential against the impact of rising interest rates, whereas the Company generally utilizes interest rate swaptions to mitigate exposure to larger, more rapid changes in interest rates.
With the issuance of the 2010 series A variable rate demand bonds, MassDOT will reduce the prior swap mismatch caused by the exercise of fixed-payer swaptions, effectively creating synthetically fixed-rate debt.
As of December 31, 2014, 84% of the Company's combined repurchase agreement and net long TBA balance was hedged through a combination of interest rate swaps, interest rate swaptions, and U.
Derivative Genius System provides back office processing, accounting and support for a variety of derivative instruments, including interest rate swaps, caps, floors, swaptions.
HEDGING ACTIVITIES As of December 31, 2014, 76% of the Company's outstanding balance of repurchase agreements, other debt and net TBA position was hedged through interest rate swaps, swaptions and U.