A stock swap (Swap) is a special agreement between two parties, according to which one of them must pay interest income to the other. The interest income is calculated on the basis of a certain stock index on predetermined dates and for the duration of the agreement. A second party makes payments at a fixed/floating rate or based on another stock index. A percentage of the notional principal is used to determine the amount of the payment.

A stock swap is a financial transaction where an investor exchanges shares of one company's stock for shares of another company's stock. This exchange can occur for various reasons, such as mergers, acquisitions, or reorganizations. In mergers and acquisitions, stock swaps are commonly used as a method of payment to shareholders of the acquired company. Instead of paying cash, the acquiring company offers its own shares to the shareholders of the target company based on a predetermined exchange ratio.

Stock swaps can be advantageous for both parties involved. For the acquiring company, it allows them to conserve cash reserves and utilize their own stock as a form of currency. Meanwhile, shareholders of the target company may benefit from potential synergies and future growth prospects of the combined entity. However, stock swaps also carry risks, such as fluctuations in the value of the acquiring company's stock and regulatory approval requirements.