Forward swap

Forward swap,

Definition of Forward swap:

  1. A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different financial instruments. A forward swap is a strategy that provides investors with the flexibility to meet investment goals. It offers financial institutions the ability to hedge risk, engage in arbitrage, and exchange cash flows or liabilities as required.

  2. Agreement to enter into a swap arrangement on a fixed date in future.

  3. A forward swap, often called a deferred swap, is an agreement between two parties to exchange assets on a fixed date in the future. Interest rate swaps are the most common type of a forward swap, though it could involve other financial instruments as well. Other names for a forward swap are 'forward start swap' and 'delayed start swap'.

How to use Forward swap in a sentence?

  1. A forward swap, often called a deferred swap, is an agreement between two parties to exchange assets on a fixed date in the future.
  2. Forward swap's offer financial institutions the ability to hedge risk, engage in arbitrage, and exchange cash flows or liabilities as required.
  3. Interest rate swaps, where the exchange of interest payments will commence at a future date, are the most common type of a forward swap.

Meaning of Forward swap & Forward swap Definition