Interest rate swaps cost

Discussion in 'Trading' started by suspend, Aug 1, 2006.

  1. suspend



    I would be very grateful if you could help me with one issue.

    Recently I got very interested in interest rate swaps and although they are not the most popular instrument on the financial markets there is still a lot of information on them. But there is one thing I couldn’t find a straight answer for. I would be very grateful if you could help me with the answer of the following question:

    If I decide to make an interest rate swap where I’ll be paying fixed and receiving floating interest (and fixed – floating = zero at the beginning) what is the price I would have to pay? Is it just some kind of commission to the investment bank or do I have to make a payment to the other side of the contract?

    I would like to thank you in advance for the help.

    Best regards
  2. Might be a good question to post in the Options Forum.

    Maverick74, riskarb, momoney, and some of those guys are VERY sharp, and may well be able to help.