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

But before officially swapping out snow shoes for suede flat booties, consider a similarly ritualistic approach to skin care. Jenna Rennert, Vogue, "Spring-Clean Your Skin! 4 Expert-Approved Ways to Purge Winter From Every Last Pore," 25 Mar. 2019 Halt your shampooing to only once or twice a week, and swapping out your shampoo for a cleansing conditioner like Purology’s will stop your color from fading and warping. Sable Yong, Teen Vogue, "Going Platinum: What to Know Before Dyeing Your Hair," 5 Oct. 2018 Additionally, the company is in the midst of swapping out the current seats with ones with plastic backing, WPVI reported, which the spokesperson said was a more sanitary option. Elizabeth Zwirz, Fox News, "SEPTA says bus pulled from service after woman reportedly believes to find bed bugs," 8 Sep. 2018 Simply swapping out Russell for a more conventional liberal Democrat (Ted Kennedy, say) would be a hard sell in a polarized environment. Matthew Yglesias, Vox, "The fight over renaming the Russell Senate Office Building after John McCain, explained," 29 Aug. 2018 The Canadian tuxedo gets a more refined look this season—just swap your blue denim jacket for a white or black version. Vogue, "Spring Has Sprung! Shop the Best Jackets for the First Day of the Season," 20 Mar. 2019 The Duchess pulled off a full outfit change in between the two, swapping a bespoke Erdem look for a white coat and Victoria Beckham dress, topped with a stylish pillbox hat. Chloe Foussianes, Town & Country, "Meghan Markle Doesn't Have Any More Official Engagements Planned Before Her Maternity Leave," 14 Mar. 2019 Thankfully, all your favorite celebs have officially nixed skinny jeans from their wardrobe, swapping for loose-fitting blues with major style. Kelsey Stiegman, Seventeen, "10 Instagram-Worthy Ways to Wear Boyfriend Jeans," 8 Jan. 2019 The second thing, upon swapping to an RTX 2080 graphics card, was that the difference between turning ray tracing on and off was very, very noticeable... in the frame-rate department. Sam Machkovech, Ars Technica, "How I went from testing a fancy new graphics card to shouting at Windows 10," 24 Nov. 2018

Recent Examples on the Web: Noun

BP Plc and ConocoPhillips are in discussions for an asset swap deal that would see the U.K. energy major gain a greater foothold in a key project in the North Sea and the U.S. explorer get Alaskan assets, according to people familiar with the talks. Kelly Gilblom And Dinesh Nair, Houston Chronicle, "BP, Conoco are said to be in talks on North Sea, Alaska assets swap," 18 May 2018 However, he later was pardoned and released from custody in July 2010 as part of a U.S.-Russian spy swap, which followed the exposure of a ring of Russian sleeper agents in the U.S. Skripal’s wife and son have both died in recent years. Jennifer Earl, Fox News, "Ex-Russian spy Sergei Skripal's poisoning: What to know," 8 Aug. 2018 This was the world of collateralized debt options (CDOs) and credit default swaps (CDS). Emily Stewart, Vox, "How close are we to another financial crisis? 8 experts weigh in.," 18 Sep. 2018 Skripal, a former Russian double agent, was jailed in Russia in 2006 for selling state secrets to British intelligence for 10 years, but he was released in 2010 as part of a high-profile spy swap. Matthew Bodner And Karla Adam, BostonGlobe.com, "US, France, Germany join Britain in blaming Russia for attack," 15 Mar. 2018 Whether the swap was intentional remains a mystery. Allysia Finley, WSJ, "The Making of a DNA Detective," 15 Feb. 2019 The next day, the government bailed out insurance giant AIG, which in the run-up to the collapse had issued staggering amounts of credit-default swaps (CDSs), a form of insurance on MBSs. Jeff Andrews, Curbed, "10 years after the financial crisis, is the housing market still at risk?," 29 Aug. 2018 Such a deal for the Heat likely would have to be a Whiteside-plus-two swap, with a sweetener to both New Orleans and the team that takes Hassan. Ira Winderman, Sun-Sentinel.com, "ASK IRA: Could Heat have managed Whiteside-Spoelstra better?," 6 May 2018 In April, Paige Davis returns to TLC to host the revival of the neighbors’ room swap, Trading Spaces. Lauren Mccutcheon, Philly.com, "Paige Davis returns to 'Trading Spaces' and hits up Philadelphia Home + Garden Show," 12 Feb. 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

11 Apr 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

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