Common Contracts
1 similar Swap Agreement contracts
Swap agreement example. What is a swap agreement. How does a land swap work.Swap Agreement • January 15th, 2024
. A swap is a type of derivative contract that allows two parties to exchange the cash flows or values of different assets for a certain period. The value of one of the assets depends on a variable factor, such as an interest rate or a commodity price. Swaps can be used to exchange fixed and variable cash flows based on an index, a currency, or an interest rate. Swaps are not standardized contracts like options and futures, but they are customized and traded privately in the over-the-counter (OTC) market. This means that there is some risk of default by one of the parties. However, the swap market is very large and liquid, with many traders who are willing to buy or sell swaps. Swaps were created in the 1980s to help traders hedge the prices of various assets, such as commodities, currencies, and interest rates. The global OTC derivatives market had a notional value of $632.2 trillion by June 2022, which was 3.6% higher than the previous year. The interest rate derivatives market alone
