Call Swaption

A type of option between two parties that can be exercised on a swap where the buyer of the swap has the right, but not obligation to, receive an agreed upon fixed interest rate. The buyer pays a premium for the right to swap at this fixed rate. Short for a call swap option, a call swaption can be used as a hedging tool to avoid risk if a bond issuer believes interest rates might decrease.

Also known as a payer swaption.

When a buyer feels it will be beneficial, he may enter into a call swaption, which will allow him to swap interest rates. Regardless of whether the buyer of the option is the rate receiver or the payer, the interest rate will be fixed, based upon terms of this agreement.

This type of swap occurs in forex trading as a currency swap where the interest paid is also agreed upon.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Call swaption — A swaption in which the buyer has the right to enter into a swap as a fixed rate payer. The writer therefore becomes the fixed rate receiver/floating rate payer. The New York Times Financial Glossary …   Financial and business terms

  • call swaption — A swaption in which the buyer has the right to enter into a swap as a fixed rate payer. The writer therefore becomes the fixed rate receiver/ floating rate payer. Bloomberg Financial Dictionary …   Financial and business terms

  • Swaption — est la contraction des mots swap et option. Il s agit d une option sur un swap : elle donne le droit d acheter (call swaption) ou de vendre (put swaption) un swap selon les conditions prévues dans le contrat optionnel. Portail de la finance …   Wikipédia en Français

  • Swaption — Swaptions sind Optionen, die es dem Käufer gegen die Zahlung einer einmaligen Prämie erlauben, zu einem bestimmten Zeitpunkt (europäische Swaption), bis zu einem bestimmten Zeitpunkt (amerikanische Swaption, extrem selten) oder zu festgelegten… …   Deutsch Wikipedia

  • swaption — An option to enter into a swap. A payer or put swaption is the option to enter into a pay fixed/receive floating swap. A receiver or call swaption is the option to enter into receive fixed/pay floating swap. American Banker Glossary options on… …   Financial and business terms

  • Call option — This article is about financial options. For call options in general, see Option (law). A call option, often simply labeled a call , is a financial contract between two parties, the buyer and the seller of this type of option.[1] The buyer of the …   Wikipedia

  • Swaption (Swap Option) — The option to enter into an interest rate swap. In exchange for an option premium, the buyer gains the right but not the obligation to enter into a specified swap agreement with the issuer on a specified future date. The agreement will specify… …   Investment dictionary

  • Covered call — Payoffs and profits from buying stock and writing a call. A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of a stock or other… …   Wikipedia

  • Naked call — A naked call occurs when a speculator writes (sells) a call option on a security without ownership of that security. It is one of the riskiest options strategies because it carries unlimited risk as opposed to a naked put where the maximum loss… …   Wikipedia

  • Свопцион колл — свопцион, обеспечивающий покупателю право на заключение сделки своп в качестве плательщика по ценной бумаге с фиксированной ставкой процента. При этом продавец опциона становится или получателем фиксированного процента, или плательщиком… …   Финансовый словарь

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