What are Swaps? Financial Derivatives Tutorial
In todays video we learn about Swaps.
These classes are all based on the book Trading and Pricing Financial Derivatives, available on Amazon at this link. https://amzn.to/2WIoAL0
Check out our website http://www.onfinance.org/
Follow Patrick on twitter here: https://twitter.com/PatrickEBoyle
What is a Swap?
A swap is a financial derivative in which two counterparties exchange cash flows of one party's financial instrument for those of the other party's financial instrument. For example, in the case of a swap involving two bonds, the two parties would be exchanging the periodic interest (coupon) payments associated with the bonds. With a swap the two counterparties agree to exchange one stream of cash flows against another stream. These streams are called the legs of the swap. The swap agreement defines the dates when the cash flows are to be paid and the way they are accrued and calculated. Usually at the time when the contract is initiated, at least one of these series of cash flows is determined by an uncertain variable such as a floating interest rate, foreign exchange rate, equity price, or commodity price.
The cash flows are calculated over a notional principal amount. Contrary to a future, a forward or an option, the notional amount is usually not exchanged between counterparties. Consequently, swaps can be in cash or collateral.
Swaps can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices.
Видео What are Swaps? Financial Derivatives Tutorial канала Patrick Boyle
These classes are all based on the book Trading and Pricing Financial Derivatives, available on Amazon at this link. https://amzn.to/2WIoAL0
Check out our website http://www.onfinance.org/
Follow Patrick on twitter here: https://twitter.com/PatrickEBoyle
What is a Swap?
A swap is a financial derivative in which two counterparties exchange cash flows of one party's financial instrument for those of the other party's financial instrument. For example, in the case of a swap involving two bonds, the two parties would be exchanging the periodic interest (coupon) payments associated with the bonds. With a swap the two counterparties agree to exchange one stream of cash flows against another stream. These streams are called the legs of the swap. The swap agreement defines the dates when the cash flows are to be paid and the way they are accrued and calculated. Usually at the time when the contract is initiated, at least one of these series of cash flows is determined by an uncertain variable such as a floating interest rate, foreign exchange rate, equity price, or commodity price.
The cash flows are calculated over a notional principal amount. Contrary to a future, a forward or an option, the notional amount is usually not exchanged between counterparties. Consequently, swaps can be in cash or collateral.
Swaps can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the expected direction of underlying prices.
Видео What are Swaps? Financial Derivatives Tutorial канала Patrick Boyle
Показать
Комментарии отсутствуют
Информация о видео
Другие видео канала
![What is a swap? - MoneyWeek Investment Tutorials](https://i.ytimg.com/vi/uVq384nqWqg/default.jpg)
![Is Warren Buffett Buying Stocks in the downturn? What are the biggest investors doing right now?](https://i.ytimg.com/vi/yM1JmdcPUdE/default.jpg)
![CFA/FRM: You will never be scared of SWAPS after watching this!](https://i.ytimg.com/vi/DE4tfkKQFRA/default.jpg)
![What Are Leveraged ETN's? | VelocityShares | UWTIF MORL MRRL | Structured Notes, Structured Products](https://i.ytimg.com/vi/wgXipK0UdPE/default.jpg)
![Which Country Is Spending The Most on Coronavirus Bailouts?](https://i.ytimg.com/vi/SvovUy3lNoc/default.jpg)
![Derivatives | Marketplace Whiteboard](https://i.ytimg.com/vi/m3im-iJdhv4/default.jpg)
![What are forward rates? What are forward rate agreements? What is an FRA?](https://i.ytimg.com/vi/MFRNN2pTGFI/default.jpg)
![What is a repo? - MoneyWeek investment tutorials](https://i.ytimg.com/vi/sbPByb-NXdQ/default.jpg)
![Crude oil prices are negative. What does this mean?](https://i.ytimg.com/vi/dfqmjSOD7pQ/default.jpg)
![What are Credit Derivatives?](https://i.ytimg.com/vi/430iZi5gcHo/default.jpg)
![What are Negative Interest Rates and How Do They Work? Negative Interest Rates Explained.](https://i.ytimg.com/vi/AfWF-ZcGYvE/default.jpg)
![Futures Contracts Compared to Forwards](https://i.ytimg.com/vi/3bPRN_GhHiY/default.jpg)
![6. What is a Bond](https://i.ytimg.com/vi/cWzgk-8QHKk/default.jpg)
![Lesson 6.1: What is swap in forex trading?](https://i.ytimg.com/vi/Z4z3aTgfWLg/default.jpg)
![Will The USO ETF Be Forced to Liquidate?? | The US Oil Fund](https://i.ytimg.com/vi/pYRSskCX-3g/default.jpg)
![Derivatives Market For Beginners | Edelweiss Wealth Management](https://i.ytimg.com/vi/tYkqwIllFX4/default.jpg)
![What Is An Options Contract? - Options Mechanics - Options Trading For Beginners](https://i.ytimg.com/vi/GzkKFRx1Dhk/default.jpg)
![Interest rate swaps - - Quick method to calculate the net effect](https://i.ytimg.com/vi/ZwQfGpHukvU/default.jpg)
![How Do Swaps Work?](https://i.ytimg.com/vi/OvF2Qh6Gs-Q/default.jpg)
![How Does Options Margin Work? | Financial Derivatives | Options Trading Lessons](https://i.ytimg.com/vi/ezUmEdm8Lic/default.jpg)