Equity Swap

Equity Swap - an Equity swap is a financial contract between two counter parts agreeing to swap cash flow at a later date. The cash flows, commonly called Legs .one leg is usually attached to a floating rate. The other leg is based on the performance the market or a stock market index this leg is gem rally called the equity leg. Most equity swaps require periodic payments or in some cases a one-time payment at the time of the swap. One reason for an equity swap world is to avoid with holding taxes or to obtain leverage. Like any swap equity swap requires a face amount value and a specified tenor, along with a payment schedule