sector swap trading

bettyboop · November 12th, 2007, 3:18 pm

Hello everyone,I have recently heard about this type of trading but do not understand what it involves, how it is done.I have looked on the internet but had little success, probably did not look properly. Could s/o explain what it is or direct me to an article??Many thanks

dexi · November 12th, 2007, 4:57 pm

HiThe simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and lending another for the same period. However, any rate of return or cost of funds is expressed in the price differential between the two sides of the transaction....

bettyboop · November 13th, 2007, 8:39 am

HiThanks very much. Forgive me but how would that apply with equities??

Chegevara · November 15th, 2007, 7:12 am

Hi everybody,There are a lot of types of swaps, such as IRS, Currency, FRA, Asset swap etc. It is very interesting and big in terms of amount business in the world. Essentially it concerns for developed markets, where you can find all interesting you information, than in emerging markets. But last give you very good opportunity for arbitrage deals. Has somebody any materials on this issue?

zippikay · November 29th, 2007, 10:27 pm

I guess almost everything can be swapped as long as you can find someone who's willing to swap with you. Then again, we can always look for swap dealers. I suppose, even equity can be swapped.http://www.finpipe.com/equityswaps.htm

Indexarb · December 17th, 2007, 3:12 pm

basically an Index total return swap where the Index is a sector ; ie Dow Jones Stoxx Sector Indices or FTSE LtdA swap on the SX7E Index is a sector swap