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A total return swap (TRS) is a contract between two parties who exchange the return from a financial asset between them.

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Does value of a TRS only involve past price movement and not expected returns?

TRS are just financing trades. The dealer is charging you to place the asset on their balance sheet. … Another way to look at these TRS is like a collateralized loan. It is similar to you buying the stock, posting it as collateral to the dealer for a loan of the purchase price. …
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