Swap transaction refers to the transaction form in which both parties agree to exchange certain assets in a certain period in the future. More precisely, a swap transaction refers to a transaction in which both parties agree to exchange cash flows with each other in a certain period in the future and think that it has equivalent economic value. \x0d\ Currency swap and interest rate swap are common. Currency swap transaction refers to the swap transaction between two currencies, which generally refers to the exchange of capital and principal of two currencies. Interest rate swap transaction is a swap transaction between different interest rates of the same monetary fund, which is generally not accompanied by the exchange of principal. \x0d\ Example: \x0d\ Buyer (steel mill): A domestic steel mill reached a contract to supply steel plate products in 20 10, and it is estimated that iron ore powder will be imported from Cape of Good Hope in March 20 10, totaling 75,000 metric tons, with an iron content of 62%. As the steel mill expects the iron ore price to rise sharply within three months, in order to lock in the procurement cost, the steel mill will bid USD/metric ton dry weight in CFR China on March 20 10 to purchase the iron ore powder swap contract with 62% iron content. \x0d\ Seller (iron ore supplier) At the same time, a supplier with iron ore inventory hopes to offset the potential losses in the spot market through swap hedging in order to avoid the risk of inventory value reduction that may be brought about by the falling iron ore price. Suppliers want to lock the price of iron ore powder at USD/metric ton dry weight. \x0d\ Broker: As an intermediary between the two parties to the transaction, the OTC broker brought the two parties together and agreed to set the price at $65,438+006.5 per metric ton after organizing negotiations between the two parties.