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# Swaps are contracts to exchange cash ( flows ) on or before a specified future date based on the underlying value of currencies exchange rates, bonds / interest rates, commodities exchange, stocks or other assets.

Another term which is commonly associated to Swap is Swaption which is basically an option on the forward Swap.

Similar to a Call and Put option, a Swaption is of two kinds: a receiver Swaption and a payer Swaption.

While on one hand, in case of a receiver Swaption there is an option wherein you can receive fixed and pay floating, a payer swaption on the other hand is an option to pay fixed and receive floating.