# Swaption

*Derivatives & Options — Finicade finance glossary*

An option on a swap — the right, not the obligation, to enter an interest-rate swap on set terms later. Companies use them to hedge financing they might or might not end up needing.

**Related terms:** [Swap](https://finicade.com/glossary/swap), [Option](https://finicade.com/glossary/option), [Interest Rate](https://finicade.com/glossary/interest-rate)

**Taught in:** Quant Quest — Numéraires & Rate Options

Source: https://finicade.com/glossary/swaption