Payer swaption - like protective put?

[sachin_patel]

This is what I read in the schweser books and I am not able to understand how.
The payer swaption is almost like a protective put in that it allows the holder to pay a set fixed rate, even if rates have increased.
How is it like protective put?

 

[ink]

let’s break it down into parts
what does it mean to enter a payer swaption? A payer swaption means that you have the option to enter into a swap as a fixed rate payer and recieve the floating rate.
When is it good to pay a fixed rate and recieve floating? When you think that interest rates are going to go up. So, in essence the payer swaption gives you the protection from rising interest rates.

 

[sachin_patel]

got it… thanks!!