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:
“Most parents aren’t even aware of how often they compare their children. . . . Comparisons carry the suggestion that specific conditions exist for parental love and acceptance. Thus, even when one child comes out on top in a comparison she is left feeling uneasy about the tenuousness of her position and the possibility of faring less well in the next comparison.”
—Marianne E. Neifert (20th century)
“And there is no trade or employment but the young man following it may become a hero.”
—Walt Whitman (1819–1892)