Agreement between parties with diverging interest to exchange payment streams based on an underlying rate, index, instrument or asset and a ‘notional amount’. An ice cream manufacturer wants a warm summer while an overseas tour operator expects a cool summer to boost his sales. If the temperature is above the reference temperature, 18°C, the ice cream company pays the tour operator out of their enhanced revenue. No premium changes hands, the upside risk of one party pays the downside risk of the other.