What Is A Carry Trade Strategy? Currency Carry Trading Introduction and Example Analysis
Such a carry trade would result in a $200 ($10,000 x [3% – 1%]) or 2% profit. Also, carry trades only work when the markets are complacent or optimistic. Uncertainty, concern, and fear can cause investors to unwind their carry trades. The 45% sell-off in currency pairs such as the AUD/JPY and NZD/JPY in 2008 was triggered by the Subprime turned Global Financial Crisis. Portfolios that … Read more