Home > Financial Encyclopedia > Derivatives > W > Warehousing

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Derivatives | W

Warehousing

The act of managing a portfolio of a specific type of financial instrument/product. For example, warehousing swaps refers to holding a portfolio of swaps usually by a swap dealer without seeking to offset each swap with an identical mirror swap. In this sense, the swap dealer becomes a counterparty to every swap held in its portfolio. The dealer earns, for its services as a dealer, a pay-receive spread (bid-ask spread) which is equal to the difference between the swap coupon the dealer pays and swap coupon the dealer receives.

Warehousing is also referred to as running a book.

See also..

Sponsored links

Resources


Support

If you are interested in supporting this project and would like to contribute, kindly see the support page, it will be a great help and will surely be appreciated.