Total cost analysis of interest-rate swaps vs. futures
The notional value is quoted for different derivatives such as swaps, equity options, and futures Futures Contract A futures contract is an agreement to buy or sell an underlying asset at a later date for a predetermined price. It’s also known as a derivative because future contracts derive their value from an underlying asset. Understanding Investing Interest Rate Swaps. Interest rate swaps have become an integral part of the fixed income market. These derivative contracts, which typically exchange – or swap – fixed-rate interest payments for floating-rate interest payments, are an essential tool for investors who use them in an effort to hedge, speculate, and manage risk.