An interest rate swap in which the floating rate leg pays LIBOR square (LIBOR, or any floating reference rate, is raised to the second power) or any power of the floating rate. Examples include the LIBROR-squared swap and the cubed swap. Since it is highly leveraged (the gearing is amplified by the power function), the power swap, which is also called a leveraged swap, can be substantially riskier than regular swaps.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Comments