It stands for interest rate swap valuation; a swap pricing method that is based either on regarding the swap’s two legs as two bonds (this is the bond-based pricing method) or on considering the swap as a portfolio of forward rate agreements (which is the FRA-based pricing method).

The value of an interest rate swap is zero, or close to zero, at the trade date (when the swap agreement is first concluded and effected), and hence it is called an on-market swap. However, its value may change with the passage of time, from the positive to the negative or vice versa (it becomes an off-market swap).