A cancellable swap in which the fixed-rate receiver/ floating-rate payer has the right, but not the obligation, to terminate the swap (put it to the other counterparty) on a number of predetermined dates prior to maturity. Therefore, it is from the perspective of the fixed-rate payer that the swap is puttable. Furthermore, this swap gives one of the counterparties the right to extend it beyond its stated maturity date.

Payment for the swap is made either by an upfront fee or a reduction in the fixed rate received. The party given the put option will have to pay a premium against the right to terminate. This premium is usually reflected in a higher floating rate that the rate without the put privilege. Sometimes, the party with the right to terminate may incur a termination fee upon exercising the right to cancel the agreement.