answersLogoWhite

0

What is swap in security market?

Updated: 9/20/2023
User Avatar

Wiki User

13y ago

Best Answer

Counterparties in a swap contract exchange risk for money.

The easiest swap to understand is the Weather Swap. You are planning a big outdoor event. You are charging admission to help pay for it, and you know if it rains no one will come. So you go to a swaps dealer and buy a weather swap. If it doesn't rain the dealer will keep your money; if it does, he will pay you the difference between your predicted and actual gate receipts. This sounds a lot like insurance, but insurance is covered by regulations much stiffer than swaps are.

User Avatar

Wiki User

13y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What is swap in security market?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Finance

Swap in foreign exchange market?

the swap is basically purchasing foreign currency in the spot market and selling at forward or purchasing at forward and selling also at forward swap in purchasing in spot rate and selling at forward and swap out is the opposit of it


How interpret the market risk of a security?

a security's risk is divided into systematic (Market risk) and Unsystematic risk (Diversifiable risk), the market risk is the risk inherent to the security, it is attributed to macro economic factors such as inflation, war etc. and affects all securities in the market and so cannot be diversified away. Market risk of a security is measured and reflected by the Beta coefficientwhich is an index that measures the security's volatility to market movements i.e. how much the returns of the security will vary if their changes in the market


What is a swap?

A place that is like a market. People gather there to buy, sell, or trade.


What is the relationship between swap rates and par yields?

The swap rate for a particular maturity is the average of the bid and offer fixed rates that a market maker is prepared to exchange for LIBOR in a standard plain vanilla swap with that maturity. The swap rate for a particular maturity is the LIBOR/swap par yield for the maturity. The swap rate can also be defined as the fixed rate in an interest rate swap that causes the swap to have a value of zero.


What is market fluctuation?

Market fluctuation is the rise or fall in price of a security or the market in a short-period of time.

Related questions

Swap in foreign exchange market?

the swap is basically purchasing foreign currency in the spot market and selling at forward or purchasing at forward and selling also at forward swap in purchasing in spot rate and selling at forward and swap out is the opposit of it


What is a swap meet?

a kind of market in California


Are there any kits out on the market to swap a RB26 into a Z32?

No


Is Beta the slope of the security market line?

No- the market risk premium is the slope of the Security Market Line (SML).


When are the days of the swap meet flea market?

The exact days for any swap meet at any flea markets would depend on the exact flea market and where it is (city, county, state, country).


How interpret the market risk of a security?

a security's risk is divided into systematic (Market risk) and Unsystematic risk (Diversifiable risk), the market risk is the risk inherent to the security, it is attributed to macro economic factors such as inflation, war etc. and affects all securities in the market and so cannot be diversified away. Market risk of a security is measured and reflected by the Beta coefficientwhich is an index that measures the security's volatility to market movements i.e. how much the returns of the security will vary if their changes in the market


What is a swap?

A place that is like a market. People gather there to buy, sell, or trade.


What is the relationship between swap rates and par yields?

The swap rate for a particular maturity is the average of the bid and offer fixed rates that a market maker is prepared to exchange for LIBOR in a standard plain vanilla swap with that maturity. The swap rate for a particular maturity is the LIBOR/swap par yield for the maturity. The swap rate can also be defined as the fixed rate in an interest rate swap that causes the swap to have a value of zero.


What is the difference between a swap meet and a flea market?

At a flea market, a person buys a space to sell his wares and only those people can sell their items. At a swap meet, anyone who pays the entrance fee can sell their items.


An example of a Primary market transaction involving money market security?

A new issue of a security with a very short maturity


What is the market cap for United Security Bancshares UBFO?

As of July 2014, the market cap for United Security Bancshares (UBFO) is $89,354,950.10.


What is the market cap for Strattec Security Corporation STRT?

As of July 2014, the market cap for Strattec Security Corporation (STRT) is $235,078,772.50.