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Carry trade: Difference between revisions
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#You have to pay the costs of holding it, so don’t forget those | #You have to pay the costs of holding it, so don’t forget those | ||
#The person to whom you sold it forward may have blown up in the meantime (but hopefully you’ll be taking margin from them so less of a bother). | #The person to whom you sold it forward may have blown up in the meantime (but hopefully you’ll be taking margin from them so less of a bother). | ||
#Don’t forget to make sure the forward curve is in fact in [[contango]], and the yield exceeds your cost of funding. Schoolboy errors, but these do happen. | |||
Happy days! | Happy days! | ||