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

Below, a quick guide to all the ink Grande swapped out in light of her breakup with Davidson. Christopher Rosa, Glamour, "How Ariana Grande Has Covered Up Her Pete Davidson Tattoos," 3 Dec. 2018 The team scrambled to find an older circuit board that could be swapped in, working all through the night, and eventually pulled it off in time for Sunday’s race. Andrew J. Hawkins, The Verge, "SpaceX’s hyperloop race was all about ‘maximum speed’ (and celebrating Elon Musk)," 28 July 2018 To buttress their case, the British authorities have portrayed Mr. Skripal as a symbolic victim who was living quietly in semiretirement in Salisbury, England, after being swapped in a high-profile spy exchange in 2010. New York Times, "Sergei Skripal Was Retired, but Still in the Spy Game. Is That Why He Was Poisoned?," 14 May 2018 Consider the Palmetto, essentially a Manhattan with rum swapped in for American whiskey. Liza Weisstuch, BostonGlobe.com, "Palmetto, one heck of a cover," 19 Apr. 2018 Cook, Okafor, Jones and Winslow started 38 of 39 games together, running alongside junior Amile Jefferson for the first two-thirds of the season before Kzyzewski swapped in sophomore Matt Jones for the stretch run. Nick Moyle, San Antonio Express-News, "In the NCAA tournament, seniors still matter," 28 Mar. 2018 Find a cleanser with hyaluronic acid, like Ernest Supplies’ Gel Cleanser, or swap your daytime moisturizer out at bedtime, in favor of an hyaluronic-acid night cream like Roc Retinol Correxion for Sensitive Skin. Adam Hurly, GQ, "These Are the Old School Grooming Rules You Should Be Breaking," 28 Mar. 2018 The bank also swapped in its own trading identification code in reports to customers, removing the codes of the outside firms, according to the New York attorney general. Annie Massa, Bloomberg.com, "BofA's Huge Fine Renews Push for More Info on Where Orders Go," 23 Mar. 2018 One audible: In the audio, Wrightstown was chosen as one of the No. 8 seeds, but Howards Grove has been swapped in here. Jr Radcliffe, Milwaukee Journal Sentinel, "What if the WIAA boys basketball tournament was just one division? Consider this imaginary 32-team bracket," 27 Feb. 2018

Recent Examples on the Web: Noun

Along with the sharp, short cut came a swap from honey blonde to an icy, white platinum shade. Lucy Wood, Marie Claire, "Khloé Kardashian Has Switched Up Her Hair Color Yet Again, But the Reason Makes Sense," 15 Apr. 2019 Jump Mini owners can look forward to a completely Jump-ified interface, with a total palette swap on the game-sorting menus and with different menu music. Sam Machkovech, Ars Technica, "Hands-on with Nintendo’s weirdest, and maybe rarest, classic console yet," 12 July 2018 Barring any availability or ticket issues, passengers may contact ANA and complete complimentary swaps, like changing from Tokyo’s Narita to Haneda Airport, from Osaka to Kobe, or from Fukuoka to Kitakyushu. Cynthia Drescher, Condé Nast Traveler, "What to Do When an Airline Changes Your Departure Airport," 13 Apr. 2018 The jail is so crowded with female inmates that the sheriff's office often has to negotiate delicate swaps: When a woman is arrested, deputies call Kimes-Brown and ask her to release someone to free up a slot. Katie Zezima, Anchorage Daily News, "An epic battle over the opioid crisis moves to an Ohio courtroom," 8 Apr. 2018 Additionally, the formula swaps potentially harsh retinol for a similar line-fighting peptide complex, called matrixyl. Sophie Wirt, Allure, "Milk Makeup Launches Its Watermelon Brightening Serum, the First-Ever Solid Serum (Exclusive)," 28 Mar. 2018 Nationals: Right-hander Anibal Sanchez (0-1, 6.52) swaps places with Scherzer. Ian Quillen, The Seattle Times, "Moran hits pinch-hit, 3-run homer as Pirates top Nats 6-3," 12 Apr. 2019 RTR Unlimited Plan is $159 per month (after getting $80 off a 60-day trial), with members receiving unlimited pieces and swaps, with no set return date. Annemarie Conte, Woman's Day, "Rent the Runway Kids Is Launching Next Week, and Your Daughters' Clothes Just Got 100% Cooler," 8 Apr. 2019 But there are some necessary swaps to make the color transformation last. Glamour, "7 Things I Wish I'd Known Before Going From Blond to Brunette," 30 Mar. 2019

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

9 May 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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