Carry Trade [live progress]
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Thread: Carry Trade [live progress]

  1. #1
    Fellow FFers,

    First of all, congrats for producing such a community, thanks everyone that participates to create this community even better.

    Today...

    The large question and unfamiliar of the modern fx and financial world: CARRY TRADE!

    Everyone is stating smthg; it can not be achieved, if it had been profitable why everyone isn't doing it, you will shed all your capital if carry trade unwinds etc..

    I started a PROGRESS account (presentation, NOT actual $) to find out what the actual FACT would be.

    The account is started on May 16 th at 12:00 pm EST.. 5000 $ invested. Below are the positions taken:

    Extended GBP/JPY Extended USD/JPY Brief GBP/USD Short CHF/JPY Brief CAD/JPY Brief USD/CAD Short USD/CHF

    I'll Be updating DAILY how this carry trade account is performing.

    Opinions along the way would make this journey very enjoyable and fun to read/debatei I think.

  2. #2
    Interesting action during the NFP

    EUR and GBP sell-off against dollar (at least originally of 9 am), and AUD NZD buying.

    Carry is back?

  3. #3
    In order to show/analyze the carry trade portfolio, I have magnified the positions by 5x.

    So, beginning from today, March 8, 2010, the portfolio will generate around $45 per day at interest. (The new positions opened also had a cost, of course, and attracted the equity to $46250. Butagain, we are after the attention, and should, in theory, win more than the first cost associated with establishing this portfolio up)

    To reiterate, we are after the interest, thus will be carrying high paying currencies, and promoting low paying currencies, such as the USD. In order to eliminate/minimize equity fluctuations will make arrangements to pairs.

    As of today, have gained approximately $48 in interest. This was portfolio based past week, with 1.0 Lot each pair. Now, have magnified the positions to 5 Lot, and targeting to make about $45 * 7 = $315.

    Below is the current state of the portfolio:

  4. #4
    March 8, US Close

    Now was mostly consolidation, as its been mostly directionless in EURUSD since last fourteen days.

    But, the interests out of AUD and TRY look strong

    After the rearrangement, today's interest comes in at $48.35.

    That equates:

    $338.45 per week = $48.35 * 7
    $1353.8 per month = $48.35 * 28 (will be greater some months)
    $16245.6 per week = $48.35 * 365

    Therefore, our first goal is to create at least $338.45 this week. Again, although the equity may end with gains that are greater, depending on short-term changes, thats not exactly what this portfolio is for. Those short term equity changes (gains/losses) will most likely undo, and should not have any affect long-term.

    Here is the situation at the US Close, Mar 8,'10:

  5. #5
    IMPORTANT!

    There's the RBNZ assembly on Wed.. The outcome will be watched by us, and if the interest rate is shifted at the assembly, will assess the portfolio as it WILL change the interest income of their portfolio and make necessary changes.

    Until then, no changes.

  6. #6
    I enjoyed of the carry trade egies of days gone by so great luck with your venture.

    Did you say which broker you're using?

  7. #7
    The interest rates are derived from CMS.

  8. #8
    Despite EUR and GBP weakness, USD does not seem to be profiting against much. The main pairs I selected to the carry trade do good.

    So, at the end of March 9, 2010, we have booked a second $45 in interest. Below is the current status of the portfolio:

  9. #9
    The thing about this carry trade portfolio is, in the brief term, the rallies of those large paying currencies will reveal as profits, and sell-offs as reductions, at the equity.

    Please be aware that this is destined to be lived short lived, and will flatten-out from the longrun. The way portfolio is to be net flat in places.

    Equity has jumped to more than 52K as of US Open. We did NOT make 2000K in interest so that leap in equity is as a result of AUD, TRY NZD rally. Again, we are following the interest:

  10. #10
    Quote Originally Posted by ;
    IMPORTANT!

    There's the RBNZ meeting on Wed.. We'll see the outcome, and if the interest rate is changed in the meeting, will assess the portfolio and make necessary modifiions, as it WILL change the interest earnings of the portfolio.

    Until then, no changes.
    Interest rate stayed constant. No changes to portfolio.

    NZD facing a sell-off though

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