Equity Swap

Equity swap generally an exchange of cash flows between two parties that permits each party to diversify its earnings, while still positioning its original belongings. The two sets of nominally similar cash flows are exchanged per the terms on the swap, which may contain an equity-based income that is traded for a fixed-income cash move, but this isn’t necessarily the situation. Besides diversification and tax advantages, equity swap additionally consent to large organizations to hedge particular assets or positions of their portfolios.