Adventures in the Carry Trade

  • 14 Aug 2013
  • By John Bilson
  • Topics: FX

Opportunities in Emerging Markets

A carry trade is a strategy in which the trader invests in a high yielding instrument financed by borrowing in a low yielding instrument. Popular carry trades include investments in low grade bonds financed by borrowings in high grade bonds, investments in long maturity bonds financed by borrowings in short maturity bonds, and options strategies in which the investor is long theta (receiving time premium).

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