Carry Trade

This is a currency trading strategy that benefits from the differentials between a currency offering a low borrowing interest rate and a currency offering a high lending interest rate. In essence, the trader will borrow/buy ‘low’ and lend/sell ‘high’.

Carry trades strategies are some of the most manageable strategies and also the oldest available for currency trading. They are also very popular amongst foreign exchange traders because traders can trade on margin and only a small deposit is required to exercise control over a large trade amount.

Key takeaways:

Carry trades are a form of trading strategy.
Carry trades are one of the simplest forms of trading and also one of the oldest.
Traders use margin trading for carry trades because only a small amount of deposit is required to control a larger amount.

Important Disclaimer:

We would like to remind that while we endeavor to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials received directly from CFI or from its employees or through any provided tools to the client or prospect from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client agrees that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited. We highly suggest you consult with a financial advisor regarding the suitability of such products. We recommend you read our full Risk Disclosure Statement available here

This website of Credit Financier Invest (DIFC) Ltd is directed to ‘Retail Clients’, ‘Professional Clients’ & Market Counterparties as defined by the DFSA. CFDs are leveraged products that incur a high level of risk. A small adverse market movement may expose the client to lose amounts exceeding the entire invested capital. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and you should be aware of the trading risks associated with leveraged products. However, Retail clients benefit from Negative Balance Protection & therefore their losses, if any, are limited to funds in the trading account.

Credit Financier Invest (DIFC) Limited is regulated by the DFSA under license number F003933