What are Swap Markets?
Swaps are agreements between two parties to exchange their different cash-flow streams which at the time of swapping must have equal present value except in very minor cases where a dealer is involved. They strive to transform the character of the elements of accounts without liquidating them. They make good speculating instruments.Swaps can be traded in an organized manner whereby one investor who has been realizing returns from a risky equity investment has the option of exchanging it with a comparably less risky cash flow like fixed income courtesy of a bureau dealing in such instruments, obviating the necessity of liquidating those equities
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