I have currently a position where I am short a 30 years fixed annuity (think of it as when you have a mortgage. You can also think of it as short 30 year bond for the purpose of this question). Cash flow (out) is in the order of $2200, and the current balance is 360000.
My position has an option to pay back the balance with no penalty.
This position is long term. I am looking for ways to offset this cash flow. Do you have any suggestions? I did not give it much thinking, but my instinct tells me that maybe something can be done such as:
1. Selling option premium on some underlyings.
2. Swaping my cash flow with another cash flow containing a lower variable interest rate.
Could you please provide ideas as well as ways to implement the above?