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

Keep scrolling for more

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
See More

Recent Examples on the Web: Verb

The mission team ended up swapping the rover over to its identical backup (B-side) computer, which still runs Curiosity to this day. Mike Wall, Space.com, "Rover Team Confident Curiosity Will Bounce Back from Glitch," 22 Sep. 2018 Face-swapping deepfakes have been the most visible example, but new applications are being found every day. James Vincent, The Verge, "Deepfakes for dancing: you can now use AI to fake those dance moves you always wanted," 26 Aug. 2018 In the video above, Peele is essentially acting — via face-swapping software — as a puppeteer for Obama’s face. Brian Resnick, Vox, "We’re underestimating the mind-warping potential of fake video," 23 July 2018 The quality of this amateur face-swapping varies enormously; getting good results takes some fiddling, a powerful PC and a large selection of images of the face being superimposed. The Economist, "What if AI made actors immortal?," 5 July 2018 He's lost touch with Hank Pym (Michael Douglas), the scientist who invented his size-swapping Ant-Man suit, and Pym's enterprising daughter, Hope (Evangeline Lilly), who has stepped into her mother's suit as The Wasp. Author: Katie Walsh, Anchorage Daily News, "Review: Playfulness makes ‘Ant-Man and the Wasp’ sing, not sting," 3 July 2018 And the real live humans who made Benjamin are taking steps toward automating video creation at a time when artificial intelligence and face-swapping technology are enabling a sketchy line-blur between what’s real and what’s not. Lauren Goode, WIRED, "AI Made a Movie—and the Results Are Horrifyingly Encouraging," 11 June 2018 Answer a few questions at the get-go to make sure the picks are in the right realm, but rest easy: Every album is easily and freely swapped at will, and members are free to make their own picks from month updated emails announcing new offerings. Corey Seymour, Vogue, "11 Gifts For Your Favorite Music Lover," 16 Nov. 2018 The tracker’s silicone wristband can be swapped with two other colors, and the OLED display can show real-time workout information like calories burned, daily activity goal progress, and smartphone notifications. Dami Lee, The Verge, "Withings’ Pulse HR is a fitness tracker with a 20-day battery life," 14 Nov. 2018

Recent Examples on the Web: Noun

The offer includes up to $14 billion in cash, with the remainder coming in a swap for new shares. Micah Maidenberg, WSJ, "Dell Sweetens Tracking-Stock Deal After Facing Shareholder Pressure," 15 Nov. 2018 George Hill also was acquired from Sacramento in this swap. cleveland.com, "Rodney Hood: 10 things to know about the Cavaliers forward," 14 May 2018 Ravens quarterback Joe Flacco was involved in a swap involving a mid-first-round pick, too. Jonas Shaffer, baltimoresun.com, "Ravens could be stuck in no man's land with potential first-round trade partners," 24 Apr. 2018 Emmanuel Mudiay will likely make his Knicks debut Sunday after the Denver Nuggets dealt him to New York in a three-team swap on deadline day. Jim Ayello, Indianapolis Star, "Cory Joseph gives Pacers defensive edge," 10 Feb. 2018 Cavs add Rodney Hood, George Hill in three-team deal (Feb. 8) The Cavaliers traded for Utah's Rodney Hood and Sacramento's George Hill in a three-team swap that continues to overhaul their roster ahead of the deadline. Detroit Free Press, "NBA trade deadline tracker: Dwyane Wade traded back to Miami," 1 Feb. 2018 Span was traded to Tampa Bay last month in a swap that brought new third baseman Evan Longoria to the Giants. Janie Mccauley, Houston Chronicle, "CF Austin Jackson agrees to $6M, 2-year deal with Giants," 23 Jan. 2018 Attendees are encouraged to bring vinyl gems from home to participate in a swap. Steve Heisler, Chicago Reader, "Arts / Do This The Chicago Polar Dash and more of the best things to do in Chicago this weekend," 5 Jan. 2018 Western governments, including the United States, have largely condemned Sirisena’s bizarre power swap. Jen Kirby, Vox, "Dueling prime ministers and assassination plots: an escalating crisis in Sri Lanka," 1 Nov. 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.

See More

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

Keep scrolling for more

Learn More about swap

Statistics for swap

Last Updated

5 Dec 2018

Look-up Popularity

Time Traveler for swap

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

See more words from the same century

Keep scrolling for more

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)

Keep scrolling for more

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

Keep scrolling for more

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

What made you want to look up swap? Please tell us where you read or heard it (including the quote, if possible).

WORD OF THE DAY

a typical or ideal example

Get Word of the Day daily email!

Test Your Vocabulary

Find the Cousins

  • a-large-tree-with-many-branches
  • Which pair shares a common word ancestor?
True or False

Test your knowledge - and maybe learn something along the way.

TAKE THE QUIZ
SCRABBLE® Sprint

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!