I hear this during morning meetings where traders are making references to buying the 5 year and hedging with 2 year and 10 year? Does this mean that the position is neutral to overall movements in interest rates? I still don't get the concept of the hedging.
Assume you're paying (the fixed rate) 5y on a swap. If you then hedge yourself by paying on a 2y swap and receiving on a 10y swap, you are netting a positive cash-flow near the 5y swap rate you pay (assuming a monotonically increasing swap curve). The reason that the receiving swap on the long end of the curve (10y) must be further away from the hedged swap (5y) than the paying swap (2y) is normally due to the decreasing nature of the term-structure of convexity $-$ i.e. the swap curve's slope decreases with maturity.