An interest rate swaption is an option agreement that protects against an increase (for purchasers/borrowers) or decline (for sellers/lenders) in the interest rate swap rate.
An interest rate swaption is an option agreement that protects against an increase (for purchasers/borrowers) or decline (for sellers/lenders) in the interest rate swap rate.
A currency option can best be described as an insurance policy providing cover against undesirable exchange rate fluctuations.
A forward rate agreement (FRA) is a contract between the bank and the company.
Clients can hedge the exchange rate on their future income and expenditure in the relevant currency.