Covered Interest Arbitrage

Next video:
Loading the player...

Covered interest arbitrage is a trading strategy that investors use to try to profit from the differences in two countries’ interest rates. 

Related Articles
  1. Forex Education

    Why China's Currency Tangos With The USD

    Investopedia explains: It takes two to tango, but unless both partners move in perfect cohesion, a sequence of graceful maneuvers can be reduced to a series of clumsy moves. The latter depiction ...
  2. Forex Education

    Bitcoin May Be The Currency Of The Future

    Forget the dollar or the euro. Bitcoin may be the next big currency to hit the world.
  3. Forex Education

    Calculating Profits And Losses Of Your Currency Trades

    The forex is a risky market, and traders must always remain alert about their trade positions. Learn how to keep on top of your currency trades.
  4. Forex Education

    Managing Currency Exposure In Your Portfolio

    The value of your investments is impacted by changes in global currency exchange rates. Find out how.
  5. Forex Education

    Currency All-Time Highs And Lows

    These four major currencies have seen some wild swings in the floating market since 1990.
  6. Forex Education

    Harmonic Patterns In The Currency Markets

    Learn how to take geometric price patterns to the next level by using Fibonacci numbers to predict movements in the forex market.
  7. Forex Education

    How Forex Speculators Profited From Famous Currency Meltdowns

    Studying currency meltdowns shows traders how they can avoid big losses (or make big money) when global politics tilt the forex market.
  8. Forex Education

    The U.S. Dollar's Unofficial Status as World Currency

    Discover how and why the U.S. dollar emerged as official currency in many foreign countries.
  9. Forex Education

    Explaining Uncovered Interest Rate Parity

    Uncovered interest rate parity is when the difference in interest rates between two nations is equal to the expected change in exchange rates.
  10. Forex Education

    Top 6 Most Tradable Currency Pairs

    The most frequently traded currency pair is the euro/U.S. dollar. The euro is the base currency in the pairing, while the dollar is the quote currency.

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center