Swap — a financial instrument representing an agreement between two parties to exchange payments or assets in the future under specified conditions. Swaps can be used for risk management, hedging, speculation, or arbitrage.

There are different types of swaps, such as:

• Interest Rate Swap: the exchange of interest payments between two parties, where one pays a fixed interest rate and the other a floating rate. 

• Currency Swap: the exchange of principal amounts and interest payments in different currencies between two parties. For example, a company might swap dollar obligations for euros. 

• Credit Default Swap (CDS): a form of default insurance. The swap buyer pays the seller a premium in exchange for compensation in case of default on certain obligations.

• Commodity Swap: the exchange of cash flows related to the price of a commodity, such as oil or gold.

In the context of Forex trading, a swap (also known as “overnight rollover”) is a fee or income for holding a position in a currency pair overnight. This is related to the difference in interest rates between the currencies in the pair. For example, if one currency has a higher interest rate than the other, the trader may earn or lose money for holding the position depending on the direction of the trade.