Word forms: (regular plural) swaptions
(Finance: Investment) A swaption is an over-the-counter option on a swap.
⇒ The buyer of a swaption has the right to enter into an interest rate swap agreement by some specified date
in the future. ⇒ The writer of the swaption becomes the counterparty to the swap if the buyer exercises. ⇒ The government refused retrospectively to legalize interest-rate swaps and swaptions entered into during the 1980s.
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