Carry Trade
Currency carry trade refers to the act of borrowing one currency that has a low interest rate in order to purchase another with a higher interest rate. A large difference in rates can be highly profitable for the trader, especially if high leverage is used. However, with all levered investments this is a double edged sword, and large exchange rate fluctuations can suddenly swing trades into huge losses.
Read more about this topic: Foreign Exchange Market
Famous quotes containing the words carry and/or trade:
“Do not you see that every misfortune is misconduct; that every honour is desert; that every effort is an insolence of your own?... You carry your fortune in your own hand.”
—Ralph Waldo Emerson (1803–1882)
“The girl must early be impressed with the idea that she is to be “a hand, not a mouth”; a worker, and not a drone, in the great hive of human activity. Like the boy, she must be taught to look forward to a life of self-dependence, and early prepare herself for some trade or profession.”
—Elizabeth Cady Stanton (1815–1902)