Swing Swap definition
Swing Swap means a contract which entitles the buyer of the contract to pay a fixed price for natural gas and the seller to pay the gas daily average at a defined location for a defined period of time. The Swing Swap is settled financially, via exchange of cash payment each day as the gas daily average is settled, rather than physically.
Swing Swap. A transaction whereby one party pays a fixed price, usually based on the settlement of an index price for a period, usually a month, and the other party pays a floating price for each day of the transaction. Approved Financial Instruments allowed to trade are limited to: • Futures Contract • Options • Commodity Option • Weather Option • Basis Swaps • Commodity (Fixed) Swaps • Swing Swaps No Currency Swaps are authorized for NJNG. For FRM, only options are approved. No naked options, futures contracts or swaps are authorized.