Talking Points:
• Carry trades can be likened to high-dividend stocks or the income on bonds
• The primary of the strategy is to short low yield currencies and go long high yield to collect difference
• Appetite for the trade is directly connected to the level of risk appetite in the market
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Chief Strategist John Kicklighter discusses underlying considerations for developing a personal trading strategy. Carry trade is one of the most ubiquitous exploits in the FX market. It is both an active strategy and an underlying characteristic of any exposure a trader takes. Given all currencies have underlying market rates associated to them, there will be a differential that is paid or earned depending on our position. These daily 'rolls' can alter our returns, reshape speculative forecasts and create significant value discrepancies that inevitably revert to norms. In this webinar, we discuss the core of the strategy, its historic level as well as some of the normal and abnormal constituents.
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