Positive Carry
Definition of 'Positive Carry'A strategy of holding two offsetting positions, one of which creates an incoming cashflow that is greater than the obligations of the other. |
|
Investopedia explains 'Positive Carry'Similar to arbitrage, positive carries generally occur in the currency market where interest paid to investors in one currency is more than they have to pay to borrow in another currency.Another example of a positive carry would be borrowing $1000 from the bank at 5% and investing it into a bond paying 6%. Thus, the coupon on the bond would pay more than the interest owing on the loan to the bank, and you pocket the 1% difference. |
Related Definitions
Articles Of Interest
-
Trading The Odds With Arbitrage
Profiting from arbitrage is not only for market makers - retail traders can find opportunity in risk arbitrage. -
Forex Trading The Martingale Way
The Martingale system boasts a 100% success rate, if you have the money. Find out if this is the right strategy for you. -
How Interest Rates Affect The Housing Market
Understand how rate changes can affect home prices, and learn how you can keep up. -
Basic Investment Objectives
You might know about different asset types, but do you know how each type contributes to a particular goal? -
Exploring The Current Account In The Balance Of Payments
Learn how a country's current account balance reflects the country's economic health. -
Investing In Property Tax Liens
Property tax liens can be a viable investment alternative for experienced investors that are familiar with the real estate market. -
Understanding And Playing The Dow Jones Industrial Average
Learn strategies for investing in this price-weighted index and how to interpret its movements. -
Guide to Pairs Trading
Pairs traders wait for weakness in the correlation, and then go long on the under-performer while simultaneously going short on the over-performer, closing the positions as the relationship returns ... -
Writing A Covered Call
Writing an option is the process of selling to another investor the right, but not the obligation, to buy or sell a stock at a given price in the near future. It can also be referred to as shorting ... -
Arbitrage Squeezes Profit From Market Inefficiency
This influential strategy capitalizes on the relationship between price and liquidity.
Free Annual Reports