sameeragarwal

good call...what an idiot *shakes head in shame*

So then a short payer swaption is obligating you to lend at a fixed rate and receive a floating rate should the counter party choose to exercise, which they would if rates went up.

A long receiver swaption on the other hand gives you the option to receive fixed and pay floating, which you would exercise if rates went down.

My mistake was that both are on the same side of the market, that is someone believing that rates will go down may take either position, but it was like saying a covered call is the same thing as buying a put.