A commodity swap in which one counterparty pays a rate based on the current difference between the spot price and a six-month futures price. As a result, this counterparty is said to have locked in a spread over the sport rate, being protected from a potential flattening or inverting of the yield curve. In return, the other counterparty pays the spot rate plus a preset margin.

This swap is principally designed to protect investors from a change in a forward market. It is the opposite of a backwardation swap.