• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Swaptions viewed as Options

F

Falak Soomro

Member
Can anyone explain me the following core reading statement from CMP section 3.3:

"A swaption can be regarded as an option to exchange a fixed-rate bond for the principal amount of the sawp - a put option in the case of paying fixed and receiving floating, a call option in the other direction"

Can anyone elaborate on this because I am unable to visualise swaptions as put option and call option? I asked one of my friend on this who is suggesting that paying fixed and receiveing floating should be a call option. Can this be wrong explanations. Please explain.
 
You must log in or register to reply here.
Back
Top