The article discusses two types of swaps: interest rate swaps and currency swaps. Interest rate swaps involve specifying a principal amount for interest calculations, exposing both parties to interest rate risk. Fixed rates for coupon swaps can be determined, and swaps can be used for speculation or hedging. Swaps can also be used for credit arbitrage and as a hedge against interest rate changes. Extendable swaps allow for maturity extension, while cancelable swaps can be terminated early.