# When pricing interest rate swaps at inception, should the fixed rate or floating rate be priced first?

In an interest rate swap, when pricing at inception (e.g. making sure the NPV is zero at inception), is the fixed rate set first and then the floating rate calculated (or vice-versa, e.g. floating rate set first and then the fixed rate calculated)?

I'm assuming it can be calculated both ways, so I could go to a broker and say:

I want to receive fixed 5% on $100 notional, what floating rate do I have to pay Mr Broker. OR I want to receive floating Libor 3M payments on$100 notional, what fixed amount do I have to pay Mr Broker.

• It is the second one.
– dm63
Apr 17, 2020 at 22:23
• You can pay or receive a spread on a floating rate but you cant set a floating rate in advanced (else it is a fixed rate). By definition a floating rate references some index in the future. May 18, 2020 at 10:44