Exchange involving Mike’s waterlogged area (5)
I believe the answer is:
swamp
'waterlogged area' is the definition.
(I've seen this before)
'exchange involving mike's' is the wordplay.
'exchange' becomes 'swap' (swap is a kind of exchange).
'involving' is an insertion indicator.
'mike' becomes 'm' (phonetic alphabet: alpha, bravo, charlie etc.).
'swap' enclosing 'm' is 'SWAMP'.
(Other definitions for swamp that I've seen before include "Seasonally-flooded lowland" , "Waterlogged area" , "Mire" , "Bog; inundate" , "Waterlogged ground" .)