Derivatives
Forwardation
February 11, 2021
Finance
Bond Interchangeability
February 12, 2021

An option that gives its holder the right, without the obligation, to enter into a forward swap at a given maturity/expiration date and a given strike price. The expiration date of the option precedes the starting date of the swap (the underlying payer swap). Upon exercise, the forward swaption will initiate a series of equal payments at each settlement date.

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