An interest rate swaption (swaption) that can be exercised at any time within a specified range, perhaps following a lockout period. The range is usually defined as the period between the lockout end date and the expiration date. Exercising the swaption causes the underlying swap to start or come into life. The underlying swap take two possible forms: a fixed-tenor swap and a fixed-end-date swap.

In the former type of swap, the tenor is fixed regardless of the date on which the swaption would be exercised. In the other type, the expiration date of the swap is pre-determined, implying that the actual life of the swap depends on when it is entered into, typically from the swaption exercise date until the prespecified end date.