How is a payer swaption like a protective put?
A payer swaption gives the buyer the right to be the fixed-rate payer (and floating-rate receiver) in a prespecified swap at a prespecified date. The payer swaption holder would only exercise this when rates rise so they get pay a lower fixed rate than what’s in the market. But how is this like a protective put? I see a protective put as something a lender would do to lock in a rate they will receive when rates fall so they are guaranteed a minimum rate on their lending.