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I was going through evaluation of outcome of a hedge using interest rate futures in BPP study text, pages 485 to 488. Panda and Rumple Inc examples. In Panda they sell at now price and buy later (futures). In Rumple they pay now and receive later. This is confusing to me. Can you explain the different approaches?
I do not have the BPP Study Text and so I cannot help you on that specific question.
However if we are borrowing money we need to sell futures (and buy back later, at the start or the loan); if we are depositing money then we need to buy futures (and sell later, at the start of the loan).
The rules and explanation of them are all covered in our free lectures on managing interest rate risk.
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