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ssary to apply the dealer’s cost of fundin g, which is likely to exceed Libor. F unding charges will need to be taken into account and modelled into the swap spread on a case-by- case basis by the trader Corollary: Trading S wap Spreads <span>Because of the complicated nature of a par asset s wap, particularly because of the n eed to collateralise a potential ly large off market swap and because the trade is directional (not duration neutral), we believe it is unlikely that an i nvestor would swap a bond using this methodology in order to speculate on short term swap-spread movements. Our discussion of the yield/yie ld methodology sho wed that the drawbacks of convexity and curve risk were unlikely to outweigh the advantage of simplicit y for most trades. Market