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In iTerm2 (and OS X in general), hitting altT inserts †. How can I use the alt key to send the correct keystroke to iTerm2 ( in this case, in order to swap two words).

PS: Using esc instead is not the solution. Esc is not a modifier (keystrokes are not repeatable).

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Both iTerm and Terminal have preferences for using option as a meta key.

You can also use DefaultKeyBinding.dict to add support for keybindings like M-f and M-u to other text views.

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    In my case, with the setting you are suggesting (Left option key acts as Meta), alt-t results in a question mark after a slight delay, but +ESC does the job. – alecail Oct 30 '12 at 11:48

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