The process of exchanging one type of bond for another type in order to capitalize on changes in the yield curve. This type of action results in the bond portfolio being reverted back to its original position. Most investors still perform this action in order to receive a short profit and then allow the original bond to mature and possibly return another profit.
Related information about reverse swap:
- Reverse Swap Definition | Investopedia
An exchange of cash flow streams that undoes the effects of an existing swap. Reverse swaps are used, instead of simply canceling the original swap, because ...
- Reverse Swap - Financial Dictionary - The Free Dictionary
A swap that restores an earlier position. For example, one may swap U.S. dollars for British pounds when doing so is advantageous to one's investment strategy, ...
- Brazil sells $370.6M in reverse-swap contracts - MarketWatch
Sep 14, 2012 ... BRASILIA--The Central Bank of Brazil Friday sold $370.6 million in reverse-swap contracts in its second auction of the day, the bank said, after ...
- Brazil's Real Closes Weaker Following Reverse-Swap Auction ...
Oct 5, 2012 ... The Brazilian real closed weaker to the dollar after the country's central bank sold reverse-swap contracts to deter the currency appreciation.
- Reverse Swap: Definition from Answers.com
restore a bond portfolio to its former position following a swap of one bond for another to gain the advantage of a yield spread or a tax loss.
- What is reverse swap? definition and meaning
Definition of reverse swap: The process of exchanging one type of bond for another type in order to capitalize on changes in the yield curve. This type of action ...
- reverse swap - Invest Definition
reverse swap definition: The exchange of one bond for another such that an earlier investment position is reestablished to the investment position that existed ...
- Reverse Swap
A swap agreement with identical terms and opposite counterparties to an existing swap. A reverse swap eliminates net obligations under the original swap but ...