spreads

charly_blue Wrote:
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> 3. Floating LIBOR Liability means that you are to
> pay LIBOR (floating) and receive Fixed.
> --> If LIBOR goes up (Eurodollar contract goes
> down), you lose money because you pay more.
>
> Thus, to hedge the position, I would say that you
> short the Eurodollar future contract.
>
> If what is stated below is correct, my analysis is
> right:
> The only part I am not sure of is: If LIBOR goes
> up Eurodollar contract goes down.

Sorry should have been more specific, you are long a floating rate bond indexed to LIBOR and need to hedge that.