ayaz_mahmud369

off the top of my head, three ways of terminating a swap

1) enter offsetting and not net the payements
2) enter offsetting and net payments
3) settle the PV upfront.

So an offsetting swap would be enter as a floating rate receiver.

A swaption is an option to enter a swap at a later date and at expiry the option is just worth the PV of the option rate and current market swap rate x notional.