A put option on a swap in which the buyer has the right, but is not obliged, to enter into a swap wherein he/ she pays the fixed rate and receives the floating rate. Upon exercising the option, the holder automatically enters into the underlying swap, according to the terms of the option contract.

Put swaptions increase in value as interest rates fall, and vice versa.

The put swaption is also referred to as a payer swaption.