Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A check that one counterparty in a swap gives to another at the end of the swap agreement. For example, in an interest rate swap, the counterparties swap two different interest rates calculated over the same nominal value. In order to make things easier, the counterparty who owes more writes a check for the difference between the two interest rates, instead of both counterparties writing checks for the whole amount owed to the other.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved