I’m a little lost on payer/receiver swaptions? I get them easily confused and can never apply their application correctly. i.e. when I should enter into one or the other. Any good tips to remember?
payer pays fixed, receiver receive fixed. you wanna use them to hedge your position. eg: if u are currently paying floating rates and are afriad that the rate gonna go up, you enter a payer swap, so when rate does increased, you excersise option and you will pay fixed, received float.
Well that sounds easy. Thanks!