Swaps in databases

Swaps, this kind of derivative allows speculators to cash in on increased future returns and swappers to safeguard themselves against floating interest rates.

Risk investors:

Speculative investors use fixed-rate swaps as a tool to bet on interest rate fluctuations.

Interest rate swaps.
In an interest rate swap, one party agrees to exchange a fixed-rate payment for another party’s floating-rate payments.
Buyers of swaps protect themselves against interest risks.

At start all parties are in it for the same amount. But when interest rates change, the value of the interest rate swap changes with the rate, so that the floating-rate payment amount may increase or decrease.

Investors with large amounts in floating-rate investments use rate-swap mechanisms to remove some of the risks from their portfolios.

Prayer swaps are payed against a fixed interest %, and received against variable %.(to ward against increasing interest rates, this bites back when interest rates drop)
Receiver swaps: a loan with a fixed rate is transferred into a variable loan. Interest paid is variable and return is fixed. Profitable when rates tend to drop.


CDS (Credit Default Swaps)
De Credit default swap (CDS) looks like a credit risk insurance. It's a way of protection against the chance that third parties won't be able to pay their due. It's an agreement where a company buys a certain amount from another party to guarantee that the other party will carry future risk.

A credit default swap (CDS) protects the holder from a named company going bankrupt. For example, it you were a supplier to Company W Company W owed you €1,000,000 you would not have received very little, if any, of money from them in their bankruptcy.

If you bought a credit default swap that protected €1,000,000 of debt, then the person who the wrote the contract (i.e., took you premium) would pay you the entire €1,000,000.

Bottom line, a CDS protects the holder against losses from companies going bankrupt. Note, the value of such a contract goes up and down.Interest determines its value.

Example: 
Factory A borrows amount Z from bank B
Bank B covers the risk by agreeing a swap with company C
B pays during the loan period, amount X to company C.
At a given moment company A may go bust, while still a borrowed amount Y rests.
C will in that case pay amount Y to company B.

(pic from japan.pimco.com)


Datastream
Swaps are broadly presented in the free text search  of Datastream, but it's hard to find out which provide data.
Advanced search, search word 'swap'>  produces a list of mere 32 active swaps.

Time series datatypes (key datatypes - equity) produce data.
Example fig. Moneyswap (DI)

Same equity, statitc datatypes

 















Wharton: in Thomson Financial's Insider database.
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