Glossary entry (derived from question below)
English term or phrase:
(currency) carry trade
Romanian translation:
operatiuni valutare cu diferenta de dobanda
Added to glossary by
Magdalena Ciubancan (X)
Feb 12, 2007 11:34
17 yrs ago
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English term
(currency) carry trade
English to Romanian
Bus/Financial
Finance (general)
daca stie cineva echivalentul in romana...
multumesc!
multumesc!
Proposed translations
(Romanian)
3 +1 | operatiuni valutare cu diferenta de dobanda | Andreea Sepi, MCIL (X) |
Proposed translations
+1
26 mins
Selected
operatiuni valutare cu diferenta de dobanda
A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates - which can often be substantial, depending on the amount of leverage the investor chooses to use.
Here's an example of a "yen carry trade": let's say a trader borrows 1,000 yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let's assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% (4.5% - 0%), as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration. If the trader in our example uses a common leverage factor of 10:1, then she can stand to make a profit of 45%.
Here's an example of a "yen carry trade": let's say a trader borrows 1,000 yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let's assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% (4.5% - 0%), as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration. If the trader in our example uses a common leverage factor of 10:1, then she can stand to make a profit of 45%.
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Comment: "Multumesc mult!"
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