Carry Trades..

[akeakamai]

Where would be a good source for fairly up-to-date interest rates that could be used for carry trading? I've tried some searches but nothing that seems very useful for carry trades (ie. just a simple list of the currency and its interest rate)

Thx to all

[rhodytrader]

You can see current rates as published by Oanda here:
https://fx1.oanda.com/user/interestrate.html

[akeakamai]

Hey thanks, that's great. Is the ask what you have to pay if you are short that currency, and the bid what you make if you are long? I never seen bid/ask on interest rates

[rhodytrader]

The interest rate market runs on a bid/ask system just like every other one. And just like all the others, you get screwed by the spread.

That's the long way of saying, yes, you pay the higher ask rate and recieve the lower bid rate.

[forexer]

What a ripoff!

[vijpra]

hey i dont understand wat the heck u r talking about carry trades? pls some explain me?

[rhodytrader]

A carry trade is when you are long a relatively high yielding currency and are short a low yielding one. The result is that you make the interest differential.

[vijpra]

pls explain me with a example...
sorry for asking questions which might me silly to established traders

[rhodytrader]

Originally Posted by vijpra

pls explain me with a example...
sorry for asking questions which might me silly to established traders

A long USD/JPY position can be considered a carry trade. That's because making that trade means you borrow JPY, for which you pay a very low interest rate. You then convert the JPY in to USD and deposit the USD, for which you receive a relatively high interest rate. The difference between what you pay on the JPY loan and what you receive on the USD deposit is the carry.

Since you can use leverage to take on relatively large positions, you can earn quite high returns on trades like that. Of course, that assumes the USD/JPY doesn't fall enough to erase your carry profits. This isn't a free lunch, despite what some might tell you. There's definitely risk involved.

[timidave2005]

Hello everyone,
1)pls what is a reasonable margin requirement for a $1000 account in a micro account?
2)How much leverage should i use for a micro account of this($1000) amount?
3)What is the value of 1 pip in a $1000 micro account?
4)I want to trade only 2% of my account daily, how do i adjust my margin or leverage inorder to fulfill that in a $1000 micro account?
i anticipate ur anwers and thank u for them in advance.