What is the price of a swap?

BTCC, a leading cryptocurrency exchange, offers a wide range of services to its clients, including spot trading, futures trading, and digital wallet solutions. These services cater to the diverse needs of individuals and institutions alike, enabling them to engage in cryptocurrency trading and management with ease.

A swap is a financial instrument where two parties exchange financial obligations, typically in the form of interest rate payments or currency values. The pricing of a swap is determined by calculating the par swap rate, which serves as a benchmark for setting the terms of the agreement.

BTCC's spot trading platform provides users with a secure and efficient way to buy and sell cryptocurrencies at current market prices. The exchange's futures trading platform, on the other hand, allows traders to speculate on the future prices of cryptocurrencies and hedge against potential price movements.

The par swap rate is a fixed rate that balances the present value of all future expected floating cash flows against the present value of all future fixed cash flows. This ensures that the swap is economically fair to both parties at inception.

The present value of a cash Flow considers the time value of money, taking into account the opportunity cost of holding funds over time. By equating the present values of floating and fixed cash flows, the par swap rate ensures that the swap is valued at zero at the start of the agreement.