Skip to content
Centrino Capital

Carry Trade Definition

A carry trade is a strategy that involves borrowing in a low-interest-rate currency to invest in a higher-yielding currency or asset.

Back to Glossary

What is a Carry Trade?

The trader aims to profit from the interest rate differential between the two currencies, in addition to any price movement.

Carry trades carry risk if exchange rates move unfavorably, which can offset or exceed the interest gained.

Example of Carry Trade

Borrowing in a currency with a 0.5% interest rate to buy a currency yielding 5% is a classic carry trade structure.

Start Your Trading Journey

Register, fund, and start trading today, your path to smarter investing begins here.