The Carry Trade - What is it and how does it un-wind?
Posted on October 21st, 2007 by johnb
Crafty traders will leave no stone unturned when it comes to making a quick buck and no place is this more evident than in “The Carry Trade”. The concept sounds quite smart and potentially simple, borrow money in Yen at 2% and invest it into a safe currency paying out 5%. What happens however when the valuations of these two currencies vary by more than the 3% margin? This is where the fun begins…
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