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What is the carry trade?

 
 
gollum
 
Reply Sat 16 Aug, 2008 06:49 pm
I understand it is used to speculate on currency exchange rates and interest rates.
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Robert Gentel
 
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Reply Sun 14 Sep, 2008 03:34 am
@gollum,
Quote:
A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates - which can often be substantial, depending on the amount of leverage the investor chooses to use.


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