QuoteOriginally posted by: dvl84QuoteOriginally posted by: MartinghoulWell, I don't really understand what the goal might be here... The best hedge for a 10y swap position is an unwind or, equivalently, a new offsetting 10y swap. Why exactly the need to hedge it with Euribors and fwd-starting swaps?If you are a market maker the entire point is that you take the other side if there is no other side.. in an ideal world you wanna buy on the bid and then sell at the offer... in real life it doesn't work like that too much.Imagine someone gives you 100mm 10yr, you make a new 2way showing a better bid and guess what .. you get given again; you now receive in 10yr 200mm. Appearantly there is a large payer in the market because all the brokers are better payers as well. Now you can do a couple of things - 1) do nothing and pray 2) take a loss and trade with the brokers 3) hedge using some futures such that you are 90% hedged and get out of the rest of your exposure later. Apart from knowing how many futures you'd need to trade you also want a methodology to derive at a theorital price based on instruments other then swaps, because is this way you kinow the price that you can get out if there is no broker market.Dont understand a terminlogy issue.....if someone gives me 100mm....Am i paying or receiving fix...!!!