swap
verb
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Definition of swap
(Entry 1 of 2)
swap
nounDefinition of swap (Entry 2 of 2)
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Synonyms for swap
Synonyms: Verb
change, commute, exchange, shift, substitute, switch, trade
Synonyms: Noun
back-and-forth, barter, commutation, dicker, exchange, quid pro quo, trade, trade-off, truck
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Examples of swap in a Sentence
Verb
He swapped his cupcake for a candy bar. I swapped seats with my sister so she could see the stage better. I liked her blue notebook and she liked my red one, so we swapped.Noun
They made the swap in secret. we made a swap: I'll do the dishes tonight and she'll do them for me tomorrow
Recent Examples on the Web: Verb
Reigning Champions League winner Liverpool didn't make any moves of note, for instance, while Man City opted for efficiency in making one major splash in landing midfield heir Rodri and swapping Danilo out for Joao Cancelo at right back. — Avi Creditor, SI.com, "The Top 10 Summer Transfer Window Classes Around Europe," 3 Sep. 2019 The old-timey cartoons are from James Lunch, a Madison Street diner owned by Kokonas’ father; one of the regulars would occasionally swap a cartoon for a meal. — Phil Vettel, chicagotribune.com, "Ya hey where? Wisconsin-style supper club offers near perfect prime rib in a Fulton Market basement," 29 Aug. 2019 Kids media online is booming as millions of children swap Saturday morning cartoons for streaming and smartphones. — Mark Bergen, Los Angeles Times, "YouTube is under fire for inappropriate kids videos. Rivals see an opening," 29 Aug. 2019 The Navigator of the Seas also went to Nassau instead of CocoCay Wednesday, while the Symphony of the Seas will swap CocoCay for Nassau on Friday. — Chabeli Herrera, orlandosentinel.com, "Hurricane Dorian has Port Canaveral on alert, while cruise lines reschedule itineraries," 28 Aug. 2019 The original Nintendo Switch has four, separated directional buttons on the left hand side, but the Switch Lite swaps these out for a control pad, which could be an enjoyable throwback for some. — Shannon Liao, CNN, "Nintendo Switch Lite: Remaking a hit for gamers on the go," 27 Aug. 2019 Plant Swap: Saturday, Sept. 14, from 11 a.m. to 1 p.m. Bring cuttings of indoor plants or perennials to swap for something new. — courant.com, "Community News For The Putnam-Killingly Edition," 26 Aug. 2019 The relay goes through the night, so even in the wee hours drivers may encounter delays along area roads, especially near exchange points where teams swap out runners for the next leg. — oregonlive.com, "The 2019 Hood to Coast relay begins Friday; officials urge cautious driving," 22 Aug. 2019 The Intercontinental Hotel Group, which owns brands such as Kimpton, Crowne Plaza and Holiday Inn, has pledged to swap out all plastic bathroom toiletries for bulk-size refillable amenities by 2021. — Elizabeth Mayhew, Washington Post, "How to cut down on single-use plastics at home," 20 Aug. 2019Recent Examples on the Web: Noun
Whether their internal evaluations and projections on certain prospects vary from others and if there is a trade to be made remain unseen, but prospect swaps are certainly something the Tigers should consider. — Anthony Fenech, Detroit Free Press, "Detroit Tigers mailbag: Here are some answers to your rebuilding questions," 6 Sep. 2019 The next swap is 1 to 5 p.m. Sunday, July 15, at 7501 Wooster Pike near Mariemont. — Sheila Vilvens, Cincinnati.com, "Nonprofit hosts second adaptive equipment swap, prepares for gala," 10 July 2019 An easy swap is to replace this with plain Greek yogurt and fresh fruit. — Ronda Elsenbrook, Houston Chronicle, "Ultra-processed foods: You are what you eat," 5 July 2019 Or any swap of future picks Why are the Warriors giving away future 2nds? — Mark Medina, The Mercury News, "Warriors mailbag: Did the Warriors make the right draft picks?," 21 June 2019 The pick swap in 2023 will be meaningless if the Lakers have a better record than the Pelicans. — Arash Markazi, latimes.com, "Lakers are winners in Anthony Davis trade no matter what happens," 17 June 2019 Okay, so this swap between Seattle and New York isn’t quite as momentous as the mega-trade that saw Anthony Davis finally join the Lakers over in the NBA. — Jon Tayler, SI.com, "What Does Edwin Encarnacion Trade Mean for the Yankees and the AL Playoff Race?," 15 June 2019 The most obvious swap was middle daughter Mandy, who was formerly played by Molly Ephraim and replaced by Molly McCook. — Megan Stein, Country Living, "'Last Man Standing' Star Kaitlyn Dever Was Just Cast in a Major Movie," 15 Mar. 2019 While the date is a success, the identity swap itself is not. — Shanté Honeycutt, Billboard, "Boy Band Flashback: When *NSYNC-Era Justin Timberlake Played a Teen Heartthrob in TV Movie 'Model Behavior'," 25 Apr. 2018These example sentences are selected automatically from various online news sources to reflect current usage of the word 'swap.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for swap
swap
nounFinancial Definition of swap
What It Is
A swap is an agreement between two parties to exchange a series of future cash flows.
How It Works
Swaps are financial agreements to exchange cash flows. Swaps can be based on interest rates, stock indices, foreign currency exchange rates and even commodities prices.
Let's walk through an example of a plain vanilla swap, which is simply an interest rate swap in which one party pays a fixed interest rate and the other pays a floating interest rate.
The party paying the floating rate "leg" of the swap believes that interest rates will go down. If they do, the party's interest payments will go down as well.
The party paying the fixed rate "leg" of the swap doesn't want to take the chance that rates will increase, so they lock in their interest payments with a fixed rate.
Company XYZ issues $10 million in 15-year corporate bonds with a variable interest rate of LIBOR + 150 basis points. LIBOR is currently 3%, so Company XYZ pays bondholders 4.5%.
After selling the bonds, an analyst at Company XYZ decides there's reason to believe LIBOR will increase in the near term. Company XYZ doesn't want to be exposed to an increase in LIBOR, so it enters into a swap agreement with Investor ABC.
Company XYZ agrees to pay Investor ABC 4.58% on $10,000,000 each year for 15 years. Investor ABC agrees to pay Company XYZ LIBOR + 1.5% on $10,000,000 per year for 15 years. Note that the floating rate payments that XYZ receives from ABC will always match the payments they need to make to their bondholders.
Investor ABC thinks that interest rates are going to go down. He is willing to accept fixed rates from Company XYZ
To do this, Company XYZ structures a swap of the future interest payments with an investor willing to buy the stream of interest payments at this variable rate and pay a fixed amount for each period. At the time of the swap, the amount to be paid over the life of the debt is the same.
The investor is betting that the variable interest rate will go down, lowering his or her interest cost, but the interest payments from Company XYZ will be the same, allowing a gain (i.e. arbitrage) on the difference.
Why It Matters
Interest rate swaps have been one of the most successful derivatives ever introduced. They are widely used by corporations, financial institutions and governments.
According to the Bank for International Settlements (BIS), the notional principal of over-the-counter derivatives market was an astounding $615 trillion in the second half of 2009. Of that amount, swaps represented over $349 trillion of the total.
Source: Investing Answers
swap
verb