cheapguy

Appreciate if you knowledgeable members can tell me how to do this. Issue: This is for regarding hedging the rising interest rates based on 12-month LIBOR index I have residential property loans which become floating in end of 2010 and mid 2011. Once they are floating they are based on 12month LIBOR +2.25% Current 1year Libor is 1.98. If there is lot of inflation in the future (between the next 2-6 years, i.e. mid 2011-mid 2015), the libor will go up. Let us say I want to buy a hedge for libor being greater than 6% for the years mid2011-mid2015, how can I do this. Treat these numbers and dates approximate and can be adjusted to the nearest settlement dates and rates. The loan amount is about $1million. What is the minimum amount for which i can buy these interest rate futures. The sole goal is to protect myself from unexpectedly high interest rates, not to speculate on the direction of the interest rates. So buying insurance against inflation. (There are other things like making the loan fixed for 30yr, but don't need 30yr fixed.Protection needed only until 2015.) Thankyou cheapguy