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

Under terms of the agreement Monday, holders of DVMT shares — also known as Dell Technologies Class V — will have the option to either swap their shares for Dell’s Class C common stock, or take $109 in cash per Class V share. Bloomberg, latimes.com, "Dell stock will trade publicly again, five years after leveraged buyout," 3 July 2018 Leaving her dramatic onstage outfits behind, the superstar opted for a softer, summery look for their day trip to the coast, swapping thigh high boots and leotards for a floaty, flirty printed dress. Lucy Wood, Marie Claire, "Beyoncé and Jay-Z's Cannes Vacation Photos Are Straight Out of a Dream," 3 July 2018 Get Down with the Locals for a Caribbean Christmas Picture yourself swapping your mittens for sunscreen, snow galoshes for a floppy hat and eggnog for beachside tropical cocktails. Princess Cruises, Bon Appetit, "Set Sail for Adventure This Holiday Season," 2 July 2018 Part of that attitudinal shift is visible in The Rwanda Dog Lovers Club, a digital community of self-professed dog owners and aficionados who spend their days swapping stories and advice on the messaging platform WhatsApp. Yana Paskova, National Geographic, "Learning to Love Dogs in Kigali," 29 June 2018 Members of the secret area show off, jockey for attention, and swap romantic attachments. Samantha Nelson, The Verge, "Netflix’s Kiss Me First has an unusually personal take on gamer culture," 29 June 2018 At one point several years ago, Mr. Felder and Mr. Golden offered to swap support for the cameras in exchange for a bus program that would primarily benefit yeshivas, or Orthodox Jewish schools, many of them in areas represented by Mr. Felder. New York Times, "Senator Does a U-Turn on Speed Cameras in School Zones," 12 July 2018 That's happened at Spaceflight Industries, which will sometimes pull out a particular smallsat that needs or wants to fly sooner, and then swap in a spacecraft from another customer that's either been standing by for less time or cares less. Sarah Scoles, WIRED, "Never Prebook Your Return Flight From a Rocket Launch," 6 July 2018 Scroll back to Evans, who had the option of swapping out his car in Raleigh or Winston-Salem, North Carolina. Christopher Elliott, USA TODAY, "Car subscriptions could be boon for travelers," 1 July 2018

Recent Examples on the Web: Noun

So in 2000, the parish and school agreed on a swap — the chapel was converted from a gym back to a worship and gathering space. Ann Zaniewski, Detroit Free Press, "Collapsed chapel, a school gym and hope, all part of this weekend's Mass Mob," 11 May 2018 Is the Trump Administration open to a prisoner swap? CBS News, "Full transcript: Vice President Mike Pence on "CBS This Morning"," 10 May 2018 Perhaps Scott is designing a Met Gala gown for her that called for a quick silver hair color swap? Colleen Kratofil, PEOPLE.com, "Cara Delevingne and Paris Jackson Wear Matching Marijuana Leaf Shirts as They Prep for the Met Gala," 2 May 2018 She got divorced after a public husband-swap with a formerly close friend. Kenzie Bryant, Vanities, "As a Canadian, Shania Twain Is Sorry," 23 Apr. 2018 The plan called for militants to then try to abduct wounded sailors and keep them as bargaining chips for future prisoner swaps. Josef Federman, BostonGlobe.com, "Rights group urges soldiers to refuse orders to fire on protesters at Israel-Gaza border," 5 Apr. 2018 To settle the dispute, the US Atomic Energy Commission funded a lab swap. Rachel Becker, The Verge, "Katsuko Saruhashi turned radioactive fallout into a scientific legacy," 22 Mar. 2018 The turning-point came when Israel negotiated a prisoner swap to free Gilad Shalit, a soldier captured and held by Hamas. The Economist, "The leader of Hamas in Gaza is the most influential man in Palestine," 26 May 2018 Some $170 trillion in outstanding swap contracts are based on Libor, including a third that are set to mature after the 2021 transition date, Mr. Bailey said. Gabriel T. Rubin, WSJ, "Global Regulators Push for Faster Transition Away From Libor," 12 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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Learn More about swap

Phrases Related to swap

swap stories

Statistics for swap

Last Updated

12 Sep 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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