Swaption
- Receiver swaptions: - give the holder the right to receive fixed-rate payments in exchange for floating-rate payments on an underlying interest rate swap.
- Payer swaptions: - give the holder the right to make fixed-rate payments in exchange for floating-rate payments on an underlying interest rate swap.
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European swaptions: - can only be exercised on the expiration date. -
American swaptions: - can be exercised at any time before the expiration date.