Steepeners are a type of interest rate swap, where one party agrees to pay the other a fixed rate in exchange for a floating rate, which is derived from the difference between long and short term rates. Many of these products also used high leverage, where the difference between the two rates is multiplied by up to 50 times to produce a higher return.

The greater the difference between those two rates, or the steeper the curve, the higher the return earned by the investor. While the curve is flat, the investor continues to pay the London Interbank Offered Rate, but in return receives zero return.