Definition of swaption in English:

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swaption

Pronunciation: /ˈswɒpʃ(ə)n/

noun

Finance
An option giving the right but not the obligation to engage in a swap.
Example sentences
  • But at least I could read up on swaps, options and swaptions while I was delayed.
  • What we use are pretty simple things that are called interest-rate swaps, where we turn a short-term instrument into a longer-term instrument, or options or ‘swaptions.’
  • How the hell was anyone even supposed to understand all this with its ‘puts’ and ‘calls’, ‘options’ and ‘swaps and ‘swaptions’ in currency, bonds, stocks and interest rates?

Origin

1980s: blend of swap and option.

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