On the quicksheet “To lower duration, pay fixed. To increase duration pay floating” Why did I think it was the other way around. Wouldnt pay floating have a duration close to Zero?
If you pay fixed you will have a Negative Duration and fixed duration is higher than floating…
think of the cash flows relative to yourself…and search the forum.
To follow up, If you Pay Fixed and Receive Floating you will have a Negative Duration If you Pay Floating and Pay fixed you will have a Positive Duration Pay = Negative REceive = Positive Fixed Duration > Floating Duraiton
Ahhh like shorting Duration, I head my head on the wrong way… So its the asset you hold (receive that is important)
ya, something like shorting duration, haha. Definitly one way of looking at it.