swap

verb
\ ˈswäp How to pronounce swap (audio) \
swapped; swapping

Definition of swap

 (Entry 1 of 2)

transitive verb

1a : to give in trade : barter
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

For Holding Archie The pair will certainly have plenty of baby stories to swap at the premiere, as Meghan recently celebrated baby Archie’s christening, while twin babies Rumi and Sir just celebrated their second birthday in June. Tara Edwards, refinery29.com, "At Long Last, Beyoncé & Meghan Markle Finally Met At The Lion King Premiere," 15 July 2019 The Rockets sent a boatload of future draft assets to Oklahoma City on Thursday to swap the bad contract of Chris Paul for the less-bad contract of Russell Westbrook, throwing a different look at a Western Conference that seems to be wide open. Dan Wolken, USA TODAY, "Opinion: Russell Westbrook-James Harden pairing probably won't work, but Rockets had no other choice but to try," 12 July 2019 Cleveland: Then and now, people collected movie posters to swap and trade, like baseball cards and comic books. Phillip Valys, sun-sentinel.com, "Reel art: Giant movie poster exhibit opening in West Palm Beach," 9 July 2019 In the past couple of years, growing public demand for better-quality ingredients at restaurants convinced McDonald’s in 2018 to swap frozen for fresh burgers. Liz Biro, Indianapolis Star, "Remember Clancy’s Hamburgers? It's coming to the Bottleworks food hall on Mass Ave.," 9 July 2019 There were many meetings on the design of a barter system that might allow Iran to swap oil for other goods, evading American sanctions. David E. Sanger, New York Times, "Iran Announces New Breach of Nuclear Deal Limits and Threatens Further Violations," 7 July 2019 Instead, the material was to be swapped privately between the lawyers involved. NBC News, "How judges added to the grim toll of opioids," 25 June 2019 The band on Meghan Markle's engagement ring seems to have been swapped from yellow gold to a micro pavé design. Erica Gonzales, Harper's BAZAAR, "Meghan Markle Apparently Updated Her Engagement Ring to Include More Stones," 24 June 2019 The National Sports Council saddled players with rules like shorter game times and full-body protection, while women were not allowed to swap jerseys after matches but, nevertheless, the game grew. Aimee Lewis, CNN, "Sissi: The Brazilian who defied a dictatorship to become a World Cup great," 21 June 2019

Recent Examples on the Web: Noun

Orlando’s youth also likely removes them from consideration, and a convoluted John Wall swap makes little sense for both Oklahoma City and Washington. Michael Shapiro, SI.com, "Which NBA Stars Could Still be Dealt Following a Seismic Summer?," 15 July 2019 Here’s another scenario: Let’s try a straight salary swap of Jackson, Snell and Langston Galloway. Vince Ellis, Detroit Free Press, "These scenarios could make sense for Detroit Pistons to get Russell Westbrook," 10 July 2019 Masai Ujiri, president of the Toronto Raptors, shocked the N.B.A. by trading away his franchise star, DeMar DeRozan, in a mid-July swap that netted Kawhi Leonard and Danny Green. Benjamin Hoffman, New York Times, "Helicopters, Cap Spikes and the Decision: The N.B.A.’s Wildest Off-Seasons," 29 June 2019 The cost to get Paul Pierce and Kevin Garnett to Brooklyn was extreme — a grab bag of players and three first-round picks plus a fourth coming via a swap of picks. Dan Woike, latimes.com, "Anthony Davis trade brings a new look to Lakers and NBA free agency," 17 June 2019 Sometimes, the only thing keeping a lineup from repeating was a swap of the hitters batting eighth and ninth. Nathan Ruiz, baltimoresun.com, "In Orioles’ 65th game, manager Brandon Hyde reuses lineup for first time," 9 June 2019 Instead, a quick swap of, say, a favorite eyeliner shade or go-to lipstick finish is a surefire way to step out of one’s comfort zone. Jenna Rennert, Vogue, "6 Game-Changing Makeup Ideas for 2019, According to a Celebrity Makeup Artist," 21 Jan. 2019 As a bonus, going with a salad instead of toast is a nutritious swap that reduces the calories of the dish. Patricia Bannan, Fox News, "10 dietitian-approved breakfasts to keep you full longer," 15 Aug. 2018 Sergei Skripal, 66, is a former Russian intelligence officer who was convicted of spying for Britain before coming to the U.K. as part of a 2010 prisoner swap. Washington Post, "Doctors say future uncertain for poisoned Skripals," 31 May 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

18 Jul 2019

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)

informal
: 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 How to pronounce swap (audio) \
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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More from Merriam-Webster on swap

Rhyming Dictionary: Words that rhyme with swap

Thesaurus: All synonyms and antonyms for swap

Spanish Central: Translation of swap

Nglish: Translation of swap for Spanish Speakers

Britannica English: Translation of swap for Arabic Speakers

Comments on swap

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