Agreement entered into to offset financial risk. For example, an interest rate swap agreement is a hedge agreement where two parties exchange periodic interest payments, commonly a fixed rate of interest for a floating rate to protect against or speculate on changes in interest rates. For more on interest rate swaps and other derivatives, see Practice Note, Derivatives: Overview (US). For more on hedges and how derivatives such as interest rate swaps are used commercially, see Practice Note, Derivatives: Commercial Uses.