swap

verb
\ˈswäp \
swapped; swapping

Definition of swap 

(Entry 1 of 2)

transitive verb

1a : to give in trade : barter

b : exchange sense 2

2 : to take turns in telling swap stories

intransitive verb

: to make an exchange

swap

noun

Definition of swap (Entry 2 of 2)

: an act, instance, or process of exchanging one thing for another

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Other Words from swap

Verb

swapper noun

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
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Recent Examples on the Web: Verb

To reduce the chance of developing TSS, Pinkerton and Minkin recommend swapping out tampons every two to three hours, and avoid sleeping in them overnight. Julie Mazziotta, PEOPLE.com, "16-Year-Old Girl Dies From Toxic Shock Syndrome Related to Tampon Use," 28 June 2018 Replacing the keyboard as a whole requires swapping out the entire top side of the main laptop body. Glenn Fleishman, Fortune, "Apple Admits to Sticky MacBook Pro Keyboards, Will Fix Them for Free," 22 June 2018 Ernst & Young, the global consultancy firm, recently swapped out traditional job interviews for hands-on auditions for candidates with developmental disorders, said Hiren Shukla, EY's neurodiversity program leader. Danielle Paquette, chicagotribune.com, "Americans with disabilities are finding new leverage in a tight job market," 21 June 2018 The Orioles got younger again Tuesday, swapping out veteran Pedro Álvarez for minor league prospect Steve Wilkerson before the start of their interleague series against Washington at Nationals Park. Peter Schmuck, baltimoresun.com, "Schmuck: Orioles want to get younger, but it's not going to happen overnight," 20 June 2018 Peter Kramer AP These Menudos — each iteration as pre-fab as the next as producers swapped out members before budding puberty changed their voices — were made for posters to line teen girls' walls. Howard Cohen, miamiherald, "Are you ready for a new generation of Menudo?," 13 June 2018 There were some neat wrinkles like, as David pointed out, the reveal that Akecheta went 10 years in the park without dying (new puzzle: Why did the techs’ manager insist this old model be sent back into the park, rather than swapped out?). The Atlantic, "Westworld: Ghost Nation, Revealed," 10 June 2018 Help your kids swap out the disposable straws by allowing them to choose a colorful, reusable straw. Allyson Shaw, National Geographic, "Reducing Plastic as a Family Is Easy. Here's How.," 4 June 2018 There is little appeal to swapping out a comfortable suburban house for a 350-square-foot condo in Boston whose biggest selling point is its proximity to a T stop. Mark Pothier, BostonGlobe.com, "The kids are gone, but their boomer parents can’t afford to downsize," 4 June 2018

Recent Examples on the Web: Noun

The insurance contracts Blackstone took out, known as credit-default swaps, typically pay out when a company defaults, usually reflecting dire financial straits. Tory Newmyer, Washington Post, "The Finance 202: Voters already fear economic pain from Trump's trade war," 9 July 2018 The insurance contracts Blackstone took out, known as credit-default swaps, typically pay out when a company defaults, usually reflecting dire financial straits. Andrew Scurria, WSJ, "How Regulators Averted a Debacle in Credit-Default Swaps," 8 July 2018 With trade rumors about Leonard swirling, here’s a look at 10 of the most memorable swaps in Spurs history in chronological order: Date: Jan. 30, 1974 Deal: Spurs trade/buy George Gervin from the Virginia Squires for $225,000. Tom Orsborn, San Antonio Express-News, "Spurs trade history includes several blockbusters," 26 May 2018 The former Russian intelligence officer was convicted of spying for Britain before coming to the U.K. as part of a 2010 prisoner swap. Author: Matt Dunham, Jill Lawless, Anchorage Daily News, "Another mystery illness rocks England after spy’s poisoning," 4 July 2018 Philadelphia attained the selection in the 2014 trade deadline three-team swap with the Bucks, which mainly sent Michael Carter-Williams to Milwaukee and Brandon Knight to Phoenix. Jake Fischer, SI.com, "From War Rooms to the Green Room: Behind the Scenes of Thursday's No. 16 Pick Chaos," 23 June 2018 Sinwar was freed in a prisoner swap with Israel in 2011 and was elected as the movement’s Gaza chief in 2017. Washington Post, "Hamas leader: Next week’s protests will be ‘decisive’," 9 May 2018 In 2010, he was freed and sent to Britain in a spy swap with the West. BostonGlobe.com, "Britain blames Russia for nerve agent attack on former spy," 12 Mar. 2018 The zazzy Coast swaps in Pepita cloth upholstery with a black and beige houndstooth pattern and a striking gray offset stripe running the length of the seat. Davey G. Johnson, Car and Driver, "Best Coast: The 2018 Volkswagen Beetle’s Stylish New Trim Level," 11 Jan. 2018

These 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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First Known Use of swap

Verb

14th century, in the meaning defined at transitive sense 1a

Noun

1625, in the meaning defined above

History and Etymology for swap

Verb

Middle English swappen to strike; from the practice of striking hands in closing a business deal

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Learn More about swap

Phrases Related to swap

swap stories

Statistics for swap

Last Updated

10 Oct 2018

Look-up Popularity

Time Traveler for swap

The first known use of swap was in the 14th century

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More Definitions for swap

swap

noun

Financial 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

English Language Learners Definition of swap

 (Entry 1 of 2)

: to give something to someone and receive something in return : to trade or exchange (things)

: to replace (something) with something else

swap

noun

English Language Learners Definition of swap (Entry 2 of 2)

: an act of giving or taking one thing in return for another thing : a trade or exchange

swap

verb
\ˈswäp \
swapped; swapping

Kids Definition of swap

 (Entry 1 of 2)

: to give in exchange : make an exchange : trade

swap

noun

Kids Definition of swap (Entry 2 of 2)

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swap

noun
\ˈswäp\

Legal Definition of swap 

1 : an exchange of securities

2 : a derivative contract in which two parties (as corporations) agree to exchange rates especially relating to debt

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Comments on swap

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