Swaps trade over-the-counter and are very customizable based on what the two parties agree to. 

Besides diversification and tax benefits, equity swaps allow large institutions to hedge specific assets or positions in their portfolios. 

An equity swap is similar to an interest rate swap, but rather than one leg being the "fixed" side, it is based on the return of an equity index or the performance of a basket of equities or indices. 

For example, one party will pay the floating leg and receive the returns on a pre-agreed-upon index of stocks or the return of equity derivatives relative to the notional amount of the contract. 

Equity swaps allow parties to potentially benefit from returns of an equity security or index without the need to own shares, an exchange-traded fund (ETF), or a mutual fund that tracks an index. 

Some Equity swaps would incorporate the early termination feature and the tenor is typically within one year. 

Most equity swaps are conducted between large financing firms such as auto financiers, investment banks, and lending institutions. 

Please call us at +886 2 6606 0302 and we will arrange for a treasury specialist to speak with you.