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

If Walmart were to swap $10 billion on dividends and turn it into employee stock grants instead, the researchers estimate 1 million employees could get about 113 Walmart shares each. Emily Stewart, Vox, "Walmart is paying $20 billion to shareholders. With that money, it could boost wages to over $15.," 25 May 2018 Commercial kimchi producers, in fact, already have a history of swapping fish products for miso to make vegan-friendly products. Marissa Fessenden, Smithsonian, "Vegan Kimchi Is Microbially Pretty Close to the Original," 7 May 2018 In the latter, the two actors would periodically swap roles. David Sturm, Columbia Flier, "Rep Stage wraps with wild 'West'," 26 Apr. 2018 In May 2014, after the last day Delgado met Markley to swap bird cadavers for cash, he was arrested, according to court documents. National Geographic, "Inside the Black Market Hummingbird Love Charm Trade," 18 Apr. 2018 The two swapped spots and Pennington tried to save penalty kicks from Bendik. Jordan Culver, Pro Soccer USA, "Orlando City goalkeeper Joe Bendik says team still jelling, UFC fighter makes appearance," 22 Feb. 2018 While most gardeners are accustomed to sharing pruning and pest control advice, try enhancing the knowledge exchange by swapping garden items too. Kier Holmes, Sunset, "10 Ways to Be a Frugal Gardener," 22 Jan. 2018 Atlanta will send Brooklyn the rights to 2016 second-round pick Isaia Cordinier and receive a 2025 second-round pick from the Nets along with the right to swap picks with the Nets in 2023 as a part of the deal involving Lin, Wojnarowski reports. Khadrice Rollins, SI.com, "Report: Nets Trade Jeremy Lin to Hawks, Take Kenneth Faried From Nuggets," 13 July 2018 In addition to taking on his salary, the Sixers sent cash considerations to the Nuggets in exchange for Chandler, a 2021 second-round pick and the right to swap 2022 second-round picks. Keith Pompey, Philly.com, "Sixers' Brett Brown sees Wilson Chandler playing a vital role in the lineup," 10 July 2018

Recent Examples on the Web: Noun

He was released as part of a spy swap in 2010 and moved to Salisbury. Jane Onyanga-omara, USA TODAY, "Russia denies involvement in new UK nerve agent poisoning," 5 July 2018 He was released in 2010 and brought to England as part of a spy swap and given British citizenship, officials said. Christina Boyle, latimes.com, "Britain to expel 23 Russian diplomats over poison attack," 14 Mar. 2018 Skripal, a former colonel in Russian military intelligence, was convicted of spying for MI6 in 2006, but was then pardoned and released by Russia as part of a 2010 spy swap. Chas Danner, Daily Intelligencer, "UK Diners May Have Been Exposed to Nerve Agent Used to Poison Russian Spy," 11 Mar. 2018 Leland, in particular, mentioned the AMC site, a 1.4 million-square-foot complex on Plymouth Road that the city got late last year as part of a land swap deal with Wayne County. Rochelle Riley, Detroit Free Press, "Gabe Leland on FBI towing probe: 'I feel OK where I'm at'," 31 May 2018 All 10 pleaded guilty and were returned to Russia as part of a swap. Fox News, "Son of Russian spies fights for Canadian citizenship," 29 May 2018 Or maybe the Padres can find a team that wants to make some sort of swap. Kevin Acee, sandiegouniontribune.com, "Chase Headley sets aside frustration to work for Padres' bigger good," 9 May 2018 In April, Zarif suggested during an interview with CBS' Face the Nation that Iran would be open to a prisoner swap if Trump showed Iran more respect and stopped making references to regime change. Nicole Gaouette, CNN, "Trump's nuclear decision is bleak news for Americans held in Iran," 9 May 2018 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

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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Statistics for swap

Last Updated

7 Nov 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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