Cryptocurrency Q&A
How does a vanilla swap work?
How does a vanilla swap work?
Maria
Wed Nov 13 2024
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6 answers
1717
I'm interested in understanding the mechanism of a vanilla swap. Could someone explain how it operates and the key components involved in this financial derivative?
6 answers
WhisperEcho
Fri Nov 15 2024
These swaps involve the exchange of fixed-rate payments for floating-rate payments.
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CrystalPulse
Fri Nov 15 2024
The floating-rate payments are based on SOFR, which stands for Secured Overnight Financing Rate.
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Isabella
Fri Nov 15 2024
SOFR is a broad measure of the cost of borrowing cash overnight.
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Valentina
Fri Nov 15 2024
Interest rate swaps are a common financial instrument traded in the market.
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isabella_doe_socialworker
Fri Nov 15 2024
Among them, "plain vanilla" swaps are the most liquid and widely traded.
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