An option that confers on the holder or owner the right to enter into a forward swap, at the swaption exercise date. That is, a typical European swaption has only one exercise date, unlike other types of swaption. A European swaption is an over-the-counter (OTC) option exercisable at a prespecified date on an underlying swap such as a vanilla interest rate swap, but it may also be any type of swap.
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