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Swap

As explained in Investing for Programmers

A swap is a contractual agreement in which parties exchange specified financial assets, liabilities, or cash flows over time.

A swap is a contractual agreement in which parties exchange specified assets or cash flows over time. As a derivative, it can help hedge interest-rate or currency exposure. section 7.4.1

Cross-border currency swap

A U.S. company needing euros and a European company needing dollars borrow in their favorable local currencies, exchange the proceeds, and repay each other over time. The arrangement can reduce transaction costs and currency risk, but it remains a complex agreement. section 7.4.1

How Investing for Programmers covers it

How deep it goes
Defines swaps and works through currency exchange, but stops short of valuation, pricing, and legal terms.
Examples
Uses a U.S.–European company exchange involving dollar and euro borrowing, repayment, and currency-risk reduction.
What it assumes
Introduces derivatives and underlying assets before applying swaps to borrowing and currency needs.
What you can do after
Evaluate how counterparties can exchange financing exposures to seek better loan terms and reduce currency risk.
How it connects
Connects derivatives with underlying assets, cash flows, interest rates, currencies, borrowing, and hedging.
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Related concepts

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