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)
“...I lost myself in my work and never felt that marriage would give me the security I wanted. I thought that through the trade union movement we working women could get better conditions and security of mind.”
—Mary Anderson (1872–1964)