Think this way, swap PV is valued off the curve, and future is valued off the future's close price, which is decided by supply and demand. 1bps move of the curve does not necessary mean your future price implies 1bps move as well, that is where the basis risk come from.

<t>Let me rephrase the question, how to hedge your own credit ( this 'unsustainable' profit appearing on some banks quarter results ) indirectly ? Selling financial index or your competitors CDS will leave you big IDR risk, which a Merrill trader should / could / would have avoided selling protectio...

<t>Let me rephrase the question, how to hedge your own credit ( this 'unsustainable' profit appearing on some banks quarter results ) indirectly ? Selling financial index or your competitors CDS will leave you big IDR risk, which a Merrill trader should / could / would have avoided selling protectio...

Could someone share some ideas of how to hedge DVA ( firm's own credit ? )