What Does Swap Transferring Risk With Participating Element – STRIPE Mean?
Investopedia explains Swap Transferring Risk With Participating Element – STRIPE STRIPEs provide a partial hedge to interest rate changes in either direction. If rates increase, the lender will profit from the portion of the loan covered by the cap. If they fall, then the lender, who would take a fixed-rate receiver position, would also be protected against a loss.
