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Updated almost 5 years ago,
Using Futures Contracts To Hedge ARMs
Has anyone out there in creative land used futures contracts to hedge interest rate risk on your ARM? I am wondering what futures to use for commercial loans with floaters past year 5 or so. Selling eurodollar futures to hedge LIBOR floaters may make sense.
Does anyone have experience implementing something like this? Is basis risk the main thing to account for?