What is Carry Trade

This is the trade on interest rates difference for the two currencies within some currency pair. To make it simpler, this is the position opening for currency pair with higher Swap–points and long-term holding of such position in order to get profit through these Swap–points.

For example, if you open 1 lot buy position for GBPJPY, you will be getting about 20 US Dollars a day. If the position is open for the whole year, the additional profit due to positive Swap-points will be $7,300!

What does Swap–points value depend on? As mentioned above, it depends on interest rates difference of the currencies forming some currency pair. E.g. the pound interest rate is 5% per year, and Japanese Yen — 0.5%, what gives us such a big amount of Swap–points in the shown above example.

However, there are currency pairs with more significant difference between interest rates, and, consequently, with more profitable Swap–points. E.g., the introduced in Akmos Trade Icelandic krona pairs — USDISK and EURISK.

The latter, for example, makes daily profit from Swap–points may be up to $50 per 1 lot! It's not hard to calculate, what will it make for a year.

However, we must say that such currency pairs usually highly volatile, and thus, rather high spreads are established.

Thus, for CARRY TRADE strategy you need to have rather big deposit, not to use “all money”and to hold open positions for quite a long period of time.