Carry Trade Definition – What is Carry Trade? | CFI LB

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 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.
CFI Financial Group is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
CFI Financial Group has regulated subsidiaries in
London • Larnaca • Beirut • Amman • Dubai • Port Louis
Credit Financier Invest - CFI LEBANON
BDL no. 40
1019238,
Ellipse Center 3rd floor, Charles
Malek Avenue, Achrafieh

CFI provides execution-only services and does not provide any investment advice. To make an investment decision, you cannot rely on the content of this website, or on any information, opinion, report or other materials (“Information”) you receive from CFI, or its representatives. Such Information is general and does not consider your objectives and your financial situation, thus they shall not be considered in any way as an express or implied promise nor a guarantee of any profit or limit of loss. CFI shall not bear any liability in case you used or relied on such Information. Please ensure that you make your own research and seek independent advice if necessary.

Forex and CFDs are leveraged products that incur a high level of risk. A small adverse market movement may expose the client to lose the entire invested capital. The majority of retail client accounts lose money when trading in CFDs. Please be aware of trading risks and that you could sustain a loss exceeding your deposited funds, even if a stop loss is used.

CFI Lebanon is regulated by the Banque du Liban and the Capital Markets Authority

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