Definitions

from The American Heritage® Dictionary of the English Language, 4th Edition

  • n. An option giving the buyer the right to enter into a swap agreement by a specified date.

from Wiktionary, Creative Commons Attribution/Share-Alike License

  • n. An instrument granting the owner an option to enter an interest rate swap.

Etymologies

Blend of swap and option.
(American Heritage® Dictionary of the English Language, Fourth Edition)
Blend of swap and option. (Wiktionary)

Examples

  • A swaption is a type of option that grants its owner the right, but not the obligation, to enter a swap agreement, typically involving interest rates.

    Japan Joint Venture Cleans House After Loss

  • Capital index measuring expectations for rate volatility, based on so-called swaption prices, fell 5.8 percent since Dec. 15.

    BusinessWeek.com -- Top News

  • In a letter to the Turnpike received Wednesday, UBS Securities said a Turnpike insurer's bond rating has fallen so much that UBS can terminate a so-called swaption agreement made in

    Business - BostonHerald.com

  • In a letter to the turnpike received Wednesday, UBS Securities said a turnpike insurer's bond rating has fallen so much that UBS can terminate a so-called swaption agreement made in 2001 and claim money it would have made over the remainder in the deal.

    Nashuatelegraph.com local, state, business and sports news

  • The House version also eliminates a Senate ban on "swaption" investments at all stage agencies, which [House transportation chair Joseph] Wagner said may have been too sweeping.

    Blue Mass. Group - Front Page

  • So, the suit invents a derivative to hedge the volatility-say a "swaption," which is an option on the interest rate swap.

    The Globe and Mail - Home RSS feed

  • NOTE: This deal, which was placed on top of the 2003 "swaption," is called a private

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  • Unlike the other swap deals, this deal, called a "swaption," is on a fixed-rate bond.

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  • Swaps have the werewolf DNA that allow one type of financial security to be mutated into another directly - or have the option to swap nature by means of a "swaption", combining an option and a swap.

    Anarkismo.net

  • But if you say, 'How do you design a "swaption"?' that goes beyond where I am today. "

    Rubin’s Detail Deficit

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