CSA CURVE IN INTEREST RATE SWAPS I Overnight Index Swaps

Swaps are better understood in Interest environment, often the operation is either floating leg or fixed leg. The bulk interest is usually guarding against the exposure risk in interest rate changes. As like in any instrument environment, the cross functional disputes of demand and supply give rice to the usual speculation, where receiver of rates expects it to drop and payer expects it to raise. This would create classical buy side and sell side of SWAPS with 2 Position for each player (Buyer & Writer). Instruments are usually OTC, but the we can hope that higher liquidity may give it an exchange existence.

In theoretical terms, OIS is a fixed for floating interest swap that is indexed against an overnight rate. This overnight rate can be viewed as an normal example of underlying in sense to better grasp things.