Price Swap Derivative

An obligation made by one company to secure the declining value of another company's assets through the commitment of shares.

Made famous by Enron, this method of backing a company's declining assets helps to inflate the value of a troubled company by hiding losses. Furthermore, due to the volatile nature of the stock market, devaluations in price of the securing company directly relates to a commitment of more shares and thus a dilution occurs.


Investment dictionary. . 2012.

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