Abstract
These instruments are a recent development in financial markets and indicate, yet again, the creativity invested in product innovation. Equity swaps differ from the interest rate and currency swaps considered so far in that at least one leg of the transaction involves the return on an equity index, a single share, or a basket of shares. There are a number of valid reasons for using this type of instrument.
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Further Reading
Chance, M. D. and D. Rich, ‘The Pricing of Equity Swaps and Swaptions’, Journal of Derivatives, Summer 1998, pp. 19–31.
Equity Swaps’, Swaps Series 3, Coopers & Lybrand, IFR Self Study Workbooks (1993).
Falloon, W., ‘Swaps on the Side’, Risk, January 1996, pp. 22–4.
Helliar, C., ‘Uses of Interest Rate and Currency Swaps by Financial Institutions’, Chartered Institute of Management Accountants (1997).
Hiemstra, M., ‘In Search of Equity Swaps’, Risk, November 1995, pp. 36–7.
Kolb, R. W. W., ‘Futures, Options and Swaps’, 2nd edn, Blackwell (1997).
Marshall, J. F. and K. R. Kapner, ‘Understanding Swaps’, Wiley (1993).
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© 2000 Brian Eales
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Eales, B.A. (2000). Equity Swaps. In: Financial Engineering. Palgrave, London. https://doi.org/10.1007/978-1-349-27856-5_5
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DOI: https://doi.org/10.1007/978-1-349-27856-5_5
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