A swaption is an option granting its owner the right but not the obligation to enter into an underlying swap. Although options can be traded on a variety of swaps, the term "swaption" typically refers to options on interest rate swaps.
There are two types of swaption contracts:
A payer swaption gives the owner of the swaption the right to enter into a swap where they pay the fixed leg and receive the floating leg.
https://gm.bankofny.com/Derivatives/ProductNotes/InterestRate.aspx?RowIndex=6
A receiver swaption gives the owner of the swaption the right to enter into a swap in which they will receive the fixed leg, and pay the floating leg.
https://gm.bankofny.com/Derivatives/ProductNotes/InterestRate.aspx?RowIndex=7
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