{"id":59665,"date":"2025-09-01T16:19:48","date_gmt":"2025-09-01T14:19:48","guid":{"rendered":"https:\/\/www.captrader.com\/?post_type=blog&#038;p=59665"},"modified":"2026-02-20T08:30:54","modified_gmt":"2026-02-20T07:30:54","slug":"carry-trade","status":"publish","type":"blog","link":"https:\/\/www.captrader.com\/en\/blog\/carry-trade\/","title":{"rendered":"Carry Trade in 2026: Understanding and applying it profitably"},"content":{"rendered":"<p class=\"wp-block-paragraph\">\"Buy cheap, sell high\" can also work with interest rates! At the <strong>Carry trade traders borrow capital at a favorable interest rate in order to subsequently deploy it with a higher return.<\/strong> In a simplified form, carry trades are one of the most popular forex strategies!<\/p>\n\n\n<style id=\"bricks-inline-css-component-lnntzm\">\n\/* BREAKPOINT: Desktop (BASE) *\/\n.block-editor-iframe__body .brxe-rtliac:not(.tag), .block-editor-iframe__body .brxe-rtliac img{aspect-ratio: 1; object-fit: contain}\n.block-editor-iframe__body .brxe-rtliac{width: 65px}\n\n\n\/* BREAKPOINT: Desktop (BASE) *\/\n.block-editor-iframe__body .brxe-lkidxf{border: 3px solid #F6F6F8; margin-top: -60px; background-color: var(--light)}\n\n\n\/* BREAKPOINT: Desktop (BASE) *\/\n.block-editor-iframe__body .brxe-jzmkoh{font-weight: 600; font-size: var(--text-xl); text-transform: uppercase}\n\n\n\/* BREAKPOINT: Desktop (BASE) *\/\n.block-editor-iframe__body .brxe-umltno ul li{ list-style: none; position: relative; padding-left: 30px;} .block-editor-iframe__body .brxe-umltno ul li::before{ content: ''; position: absolute; left: 0; top: 0.4em; width: 15px; height: 15px; background-image: url('\/wp-content\/uploads\/2024\/02\/square-full-solid.svg'); background-size: contain; background-repeat: no-repeat;}\n\n\n\/* BREAKPOINT: Mobil Hochformat *\/\n@media (max-width: 478px){\n.block-editor-iframe__body .brxe-xowhkb{margin-top: 20px}\n}\n\n\/* BREAKPOINT: Desktop (BASE) *\/\n.block-editor-iframe__body .brxe-lnntzm{background-color: #F6F6F8; align-items: center; position: relative; margin-top: 60px; padding-right: var(--space-l); padding-bottom: var(--space-l); padding-left: var(--space-l)}\n\n\n\/* Disable links in editor *\/\n.block-editor-iframe__body a.brxe-lnntzm, .block-editor-iframe__body .brxe-lnntzm a{ pointer-events: none; }\n<\/style><div class=\"brxe-lnntzm brxe-block\"><div class=\"brxe-lkidxf brxe-div radius-full padding-s\"><img decoding=\"async\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Icons_Uebersicht-blau.svg\" class=\"brxe-rtliac brxe-image css-filter size-full\" alt=\"A simple outline of a document with horizontal lines and a yellow magnifying glass in front of it, symbolizing the document check or search.\" \/><\/div><div class=\"brxe-xowhkb brxe-block\"><h2 class=\"brxe-jzmkoh brxe-heading\">The most important in a nutshell<\/h2><div class=\"brxe-umltno brxe-text\"><ul>\n<li>In a carry trade, a trader raises capital at favorable conditions and thus generates higher profits<\/li>\n<li>Traders use this approach in forex trading to trade currencies with low interest rates against those with high interest rates<\/li>\n<li>Risks arise, among other things, from changes in interest rates or exchange rates<\/li>\n<\/ul>\n<\/div><\/div><\/div>\n\n\n<h2 class=\"wp-block-heading\">Carry trade definition and examples&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The term carry trade describes a financial transaction with a very simple basic concept:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Traders first raise capital on the financial market and have to pay interest on it (interest expense). They therefore choose a currency with low interest rates.<\/li>\n\n\n\n<li>You then invest this money in products with higher interest rates (interest income).&nbsp;<\/li>\n\n\n\n<li>The interest rate difference represents your profit.&nbsp;<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"707\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-1024x707.png\" alt=\"Diagram explaining the carry trade: A lender provides capital at a low interest rate, a trader borrows the money and invests it in a high-yield financial product, pays it back with interest and keeps the profit from the interest rate difference.\" class=\"wp-image-60190\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-1024x707.png 1024w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-300x207.png 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-768x531.png 768w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-18x12.png 18w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade.png 1100w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">Such a<strong> Carry trade is successful if the income is greater than the costs of the business.<\/strong> In the opposite case, there is a loss or failure.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is an extremely versatile strategy, as traders can use the cheaply borrowed money in different ways. These include, for example&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Fixed-interest products such as call money or fixed-term deposits<\/li>\n\n\n\n<li><a href=\"https:\/\/www.captrader.com\/en\/blog\/high-dividend-stocks\/\">Dividendenstarke Aktien<\/a> or other investments that offer profit participation<\/li>\n\n\n\n<li>Long, medium or <a href=\"https:\/\/www.captrader.com\/en\/blog\/short-term-bonds\/\">Short-term bonds<\/a>&nbsp;<\/li>\n\n\n\n<li>And much more!<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-group info-box\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p class=\"wp-block-paragraph\"><strong>Good to know: <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The term carry trade does not include situations in which traders use the borrowed capital for active trading. For example, those who use the money as <a href=\"https:\/\/www.captrader.com\/en\/blog\/daytrading-starting-capital\/\">Day trading starting capital<\/a> uses, <a href=\"https:\/\/www.captrader.com\/en\/blog\/swing-trading-strategies\/\">Swing trading strategies<\/a> exercises or with it <a href=\"https:\/\/www.captrader.com\/en\/blog\/trade-options\/\">Trade options<\/a> does not operate a carry trade! This is much more about <a href=\"https:\/\/www.captrader.com\/en\/blog\/debt-trading\/\">Debt capital trading<\/a>!&nbsp;<\/p>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">However, this form of carry trade is very costly: Investors have to take out loans in other countries, exchange currencies and then invest in interest-bearing products. In practice, it is mainly institutional market participants such as funds and banks, as well as investors with large assets, who take this route.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>For private traders, there is often a simpler option in forex trading.&nbsp;<\/strong><\/p>\n\n\n\n<div class=\"wp-block-group info-box\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p class=\"wp-block-paragraph\"><strong>CapTrader can do that: <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With 28 currencies available in over 100 currency pairs, CapTrader is the ideal broker for carry trades and all other forex strategies! You benefit from maximum liquidity, tight spreads and excellent trading conditions.&nbsp;<\/p>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">How do interest rate differences arise?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Modern financial market theories assume that <strong>carry trades should not actually be possible.<\/strong> Similar to arbitrage trading, the interest rate differentials are a <strong>Inefficiency of the market.&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In a perfect market environment, the discrepancies should not exist, as market participants would immediately open large positions in search of profit. This demand would quickly close any divergences.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The fact that carry trades are effective trading strategies shows that the interconnectedness of the financial markets is not complete. They arise from regional differences that create unique economic situations. They are the basis for the attractive interest rate differentials that forex traders take advantage of.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>There are numerous reasons for the deviations. <\/strong>If we look at some of the countries whose currencies are typically used for carry trades, it quickly becomes clear how this comes about:&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Japan<\/strong>once the country with the highest per capita income of all G7 countries and the second largest economy in the world, experienced a decades-long phase of economic contraction and permanent deflation. This only ended in 2024 and was characterized by extremely low and even negative interest rates. The Japanese yen was the most popular base currency for carry trades for many years.&nbsp;<\/li>\n\n\n\n<li><strong>Australia<\/strong> on the other hand, has enjoyed impressive growth since the 1990s, supported by the mining industry, among others. With 26 years without a recession, it set a global record that only ended in 2020. This is accompanied by high interest rates (with the exception of a two-year Covid phase) of recently over 4 %, which make the Australian dollar ideal as a counter currency for carry trades.&nbsp;<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"521\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/05\/Carry-Trade-Cash-Rate-Ziel-1024x521.png\" alt=\"Carry trade cash rate target\" class=\"wp-image-61118\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/05\/Carry-Trade-Cash-Rate-Ziel-1024x521.png 1024w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/05\/Carry-Trade-Cash-Rate-Ziel-300x153.png 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/05\/Carry-Trade-Cash-Rate-Ziel-768x391.png 768w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/05\/Carry-Trade-Cash-Rate-Ziel-18x9.png 18w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/05\/Carry-Trade-Cash-Rate-Ziel.png 1100w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">With several periods of interest rates above 4 %, the Australian dollar is an extremely popular currency for carry trades.\u00a0<\/figcaption><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>United States of America<\/strong> form the world's largest economy, accounting for over a quarter of the global economy alone. This has been accompanied by phases of intensive growth, but also by particularly dramatic crises. Accordingly, the interest rate in recent years has been a rollercoaster ride: Since the turn of the millennium, there have been three phases of interest rates above 5 %, three phases with interest rates below 1 % and quite a few other, smaller changes. These extreme differences have always made the US dollar interesting for carry trades, both as a base currency and as a counter currency.&nbsp;<\/li>\n\n\n\n<li><strong>European Union:<\/strong> Since the 2008 financial crisis, the key interest rate in the European Union has been close to the zero percent mark. It was only after the Covid crisis had been overcome that there was an increase, climbing to just over 4 %. The euro therefore not only offers interesting opportunities for carry trades; like the US dollar, it is also valued by forex traders due to its relative stability.&nbsp;<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\"><a id=\"brxe-wczkhi\" href=\"https:\/\/www.captrader.com\/en\/orderarten\/\" class=\"brxe-block margin-bottom-s banner-bild\"><img loading=\"lazy\" decoding=\"async\" width=\"1500\" height=\"500\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal_Orderarten_EN.jpg\" class=\"brxe-image css-filter size-full\" alt=\"A person holds a smartphone with a trading app in front of a computer monitor with stock charts; text advertises trading with 100 order types and algos.\" id=\"brxe-ebhyij\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal_Orderarten_EN.jpg 1500w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal_Orderarten_EN-300x100.jpg 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal_Orderarten_EN-1024x341.jpg 1024w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal_Orderarten_EN-768x256.jpg 768w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal_Orderarten_EN-18x6.jpg 18w\" sizes=\"auto, (max-width: 1500px) 100vw, 1500px\" \/><\/a><a id=\"brxe-sxpnay\" href=\"https:\/\/www.captrader.com\/en\/depot-eroeffnen\/\" class=\"brxe-block margin-bottom-s\"><img loading=\"lazy\" decoding=\"async\" width=\"350\" height=\"700\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Orderarten_EN.jpg\" class=\"brxe-image css-filter size-full\" alt=\"Person holding a smartphone with a trading app on the screen in front of computer monitors displaying financial charts; ad text promoting trading with 100 order types and algorithms.\" id=\"brxe-hxuxkx\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Orderarten_EN.jpg 350w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Orderarten_EN-150x300.jpg 150w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Orderarten_EN-6x12.jpg 6w\" sizes=\"auto, (max-width: 350px) 100vw, 350px\" \/><\/a>\n<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Practical significance in Forex trading<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The concept of the carry trade is mainly used in forex trading, where it is known as the \"<strong>Currency carry trades<\/strong>\" are called. They are so popular there that the meaning has shifted: <strong>Today, the term carry trade actually always refers to this forex variant.&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Merchants can borrow capital in a low-interest currency and exchange it for a means of payment with a higher interest rate. The actual <strong>Investing in a financial product is no longer necessary<\/strong>as the mere holding of the position already requires a <strong>remuneration: the rollover rate<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Rollover rate: How to profit from currency carry trades<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Forex positions are closed daily at 11:00 am German time (5:00 pm EST) and the same position is opened for the next trading day. This process runs automatically and is referred to as \"Tomorrow Next\", \"Tom-next\" or \"Rolling\".&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>If traders hold a currency pair with different interest rates, they are charged the interest rate difference at that time. <\/strong>This is referred to as the \"rollover rate\". It can be positive or negative and thus result in profits or losses.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The interest rates of the base and counter currencies are decisive.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"570\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Divisenhandel-1024x570.png\" alt=\"Image explaining currency pairs in trading: Euro as base currency, US dollar as quote currency and exchange rate 1.10, with captions describing each term in German and a reference to their role in the carry trade strategy.\" class=\"wp-image-60192\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Divisenhandel-1024x570.png 1024w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Divisenhandel-300x167.png 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Divisenhandel-768x427.png 768w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Divisenhandel-1536x854.png 1536w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Divisenhandel-2048x1139.png 2048w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Divisenhandel-18x10.png 18w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li>If the base currency has a lower interest rate than the counter currency, a profit is made. This is a positive carry trade. The broker credits the trader with the interest rate difference on a pro rata basis.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If, on the other hand, the base currency has a higher interest rate than the counter currency, the trader incurs a loss when rolling between two days. The broker deducts these costs accordingly and there is a negative carry trade.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The rollover rate is calculated from the interest rate difference between the two currencies. As this is only the pro rata interest for one day, the result must be divided by 365 days. The respective exchange rate also plays a role in the result, resulting in the following formula:&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"120\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Rollover-Rate.png\" alt=\"Formula for calculating the rollover rate: (R of the base currency minus R of the counter currency) divided by 365 times U - an essential aspect for understanding the carry trade strategy.\" class=\"wp-image-60191\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Rollover-Rate.png 600w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Rollover-Rate-300x60.png 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/04\/Carry-Trade-Rollover-Rate-18x4.png 18w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\"><em>R Base currency: Interest rate of the base currency<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>R Counter currency: Interest rate of the counter currency<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>U = exchange rate<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Example of carry trades<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">To conclude a carry trade with a positive result, traders must hold a currency pair with a suitable interest rate differential: The base currency should have the lowest possible interest rate, while the counter currency should have the highest possible interest rate.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For a long time, the Japanese yen was a popular currency for raising capital cheaply: The Japanese key interest rate has hovered around zero points since 2000 and only rose slightly again in 2024! In this environment, market participants were able to borrow money extremely cheaply. <\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"521\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Niedrige-Zinsen-1024x521.png\" alt=\"Carry trade Low interest rates\" class=\"wp-image-61120\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Niedrige-Zinsen-1024x521.png 1024w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Niedrige-Zinsen-300x153.png 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Niedrige-Zinsen-768x391.png 768w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Niedrige-Zinsen-18x9.png 18w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Niedrige-Zinsen.png 1100w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">In contrast, we receive comparatively high interest rates for the Australian or New Zealand dollar<\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">A classic carry trade therefore looks like this, for example:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A market participant borrows Japanese yen at a low interest rate (short position). He only pays 0.5 % interest p.a. for this.&nbsp;&nbsp;<\/li>\n\n\n\n<li>At the same time, he buys Australian dollars (long position), as he receives a high interest rate of 4 %.<\/li>\n\n\n\n<li>The interest rate differential for this position is 3.5 % per year&nbsp;<\/li>\n\n\n\n<li>The YEN:AUD exchange rate in our example is 0.011<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This results in:&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">R Rollover = (0.5 - 4) \/ 365 \u00d7 0.011 = 0.871 %<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If everything goes according to plan, the retailer in our example can therefore rely on a<strong> Return of 0.871 % in just one trading day.<\/strong> Transaction costs must be deducted from the result. If margin trading was used (trading with leverage), the result can be multiplied.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Risks of carry trades<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Carry trades offer enormous profit potential and are therefore hugely popular strategies in forex trading! However, as is usual in the financial world, there are also<strong> No return without risk.&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A carry trade is subject to<strong> two typical dangers:&nbsp;<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. changes in interest rates<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A successful carry trade requires a base currency with a low interest rate and a counter currency with a higher interest rate. Should the <strong>Interest rates of one or both currencies develop unfavorably<\/strong>is a <strong>Reduced return<\/strong> or even a loss is possible!&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means for the base currency:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Rising interest rates<\/strong> = negative, as it now costs more to borrow money here.<\/li>\n\n\n\n<li><strong>Falling interest rates <\/strong>= positive, as the cost of lending money is now falling.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The following applies to the counter currency:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Rising interest rates<\/strong> = positive, as an investor receives a higher return.<\/li>\n\n\n\n<li><strong>Falling interest rates <\/strong>= negative, as it is now less profitable to hold this currency.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">To put it simply:<strong> The greater the gap between the interest rates of the two currencies, the more lucrative the carry trade.<\/strong> A smaller distance, on the other hand, makes this strategy less profitable.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A look at the historical interest rate development in Japan and Australia shows that changes in the popular currency pair were quite frequent. They were mainly driven by Australia's active interest rate policy, while Japan maintained a steady -0.1 % for many years.&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"605\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Zinsveraenderungen-1024x605.png\" alt=\"Carry trade interest rate changes\" class=\"wp-image-61119\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Zinsveraenderungen-1024x605.png 1024w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Zinsveraenderungen-300x177.png 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Zinsveraenderungen-768x454.png 768w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Zinsveraenderungen-18x12.png 18w, https:\/\/www.captrader.com\/wp-content\/uploads\/2025\/06\/Carry-Trade-Zinsveraenderungen.png 1100w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\"><strong>Changes in interest rates can have a massive impact on a carry trade<\/strong>Fortunately, they occur comparatively rarely and are almost always announced by the responsible institutions.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. exchange rate changes<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Calculations of the return on a carry trade are always based on the assumption of a constant exchange rate. Should the <strong>However, if the exchange rate between the base currency and the counter currency changes, this also influences the possible profits of such a position!<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the price of the counter currency rises, traders can also enjoy a book profit (in addition to the interest gains from the carry trade). The same naturally also applies if the base currency falls in value.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In addition to this gain in value, the rollover rate also improves. We now receive a better return if the currency pair is held overnight.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Conversely, there is a loss in value if the base currency increases in value or the counter currency decreases. Not only does the price of the currency pair held decrease, but the rollover interest rate is also reduced.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In our example yen - Australian dollar this means:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>YEN\/AUD exchange rate rises = we make an additional profit and receive a higher rollover rate.<\/li>\n\n\n\n<li>YEN\/AUD exchange rate falls = we make an additional loss and our rollover rate falls.&nbsp;<\/li>\n<\/ul>\n\n\n\n<div class=\"wp-block-group info-box\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p class=\"wp-block-paragraph\"><strong>CapTrader can do that: <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With the constant threat of exchange rate changes, the last thing forex traders need is additional costs and mark-ups. At CapTrader, you can trade foreign currencies for as little as \u20ac3.75 per transaction! This is how we ensure that your profits end up where they should: in your pocket!<\/p>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Additional risks due to use of leverage<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">An important reason for the enormous popularity of forex trading is the <strong>Possibility to act with high leverage. <\/strong>This allows profits, but also losses, to be multiplied. However, due to the potential risks involved, it is <a href=\"https:\/\/www.captrader.com\/en\/blog\/trading-for-beginners\/\">Trading for beginners<\/a> rather to avoid.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In order to achieve leverage, <strong>a trader borrows additional capital from his broker. <\/strong>He must repay the amount once the transaction has been completed. In the meantime, however, he can wager significantly more money and may keep any winnings.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, if losses are incurred, the trader must limit them or bear them himself. If a transaction is too negative and the broker's loan is at risk, it can lead to the <a href=\"https:\/\/www.captrader.com\/en\/blog\/margin-call-meaning-and-examples-when-the-broker-rings-twice\/\">Margin Call<\/a> come: The broker pulls the ripcord and asks the trader to close the position, reduce it or bring in additional money.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are serious risks associated with carry trades:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest rate risk of the base currency<\/li>\n\n\n\n<li>Interest rate risk of the counter currency<\/li>\n\n\n\n<li>Exchange rate risk between the two currencies<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Such a business can quickly develop contrary to our expectations and result in losses. <strong>This result is reinforced by a lever. <\/strong>We would therefore like to emphasize once again that persons who use the <a href=\"https:\/\/www.captrader.com\/en\/blog\/learn-to-trade\/\">Learn to trade<\/a> should initially only act with very small levers or without any leverage at all.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also advisable to first <a href=\"https:\/\/www.captrader.com\/en\/depot\/paper-trading-account\/\">CapTrader Paper Trading Account<\/a> to use. Here you can try out carry trades in a safe environment under real conditions.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\"><a id=\"brxe-kbumbq\" href=\"https:\/\/www.captrader.com\/en\/depot-eroeffnen\/\" class=\"brxe-block margin-bottom-s banner-bild\"><img loading=\"lazy\" decoding=\"async\" width=\"1500\" height=\"500\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal-Astronaut_EN.jpg\" class=\"brxe-image css-filter size-full\" alt=\"An astronaut floating in space with the earth in the background, next to it an advertising text about share trading services and a yellow &quot;Open account&quot; button.\" id=\"brxe-xmcpzb\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal-Astronaut_EN.jpg 1500w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal-Astronaut_EN-300x100.jpg 300w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal-Astronaut_EN-1024x341.jpg 1024w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal-Astronaut_EN-768x256.jpg 768w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_horizontal-Astronaut_EN-18x6.jpg 18w\" sizes=\"auto, (max-width: 1500px) 100vw, 1500px\" \/><\/a><a id=\"brxe-devmle\" href=\"https:\/\/www.captrader.com\/en\/depot-eroeffnen\/\" class=\"brxe-block margin-bottom-s\"><img loading=\"lazy\" decoding=\"async\" width=\"350\" height=\"700\" src=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Astronaut_EN.jpg\" class=\"brxe-image css-filter size-full\" alt=\"An astronaut floats in space next to ad text promoting stock trading features such as global exchanges, short selling and fractional shares. A yellow button reads &quot;Open an account&quot;.\" id=\"brxe-edyjfs\" srcset=\"https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Astronaut_EN.jpg 350w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Astronaut_EN-150x300.jpg 150w, https:\/\/www.captrader.com\/wp-content\/uploads\/2026\/01\/CapTrader_Werbebanner_vertikal_Astronaut_EN-6x12.jpg 6w\" sizes=\"auto, (max-width: 350px) 100vw, 350px\" \/><\/a>\n<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Carry trading in practice<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">If you would like to use carry trading, you can <strong>Different possibilities <\/strong>with their own advantages and disadvantages. Which option is right for you depends on your previous experience, the capital available and your risk profile, among other things.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. currency carry trades<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Probably the simplest variant<strong> Currency carry trades. <\/strong>Thereby <strong>hold a currency pair overnight<\/strong>to obtain the rollover rate. If the interest rate of the base currency is lower than the interest rate of the counter currency, this rollover rate will be positive. You make a profit!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Only a few steps are required for implementation:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.captrader.com\/en\/blog\/open-a-securities-account\/\">Open an account<\/a> with a broker such as CapTrader, which offers forex trading.&nbsp;<\/li>\n\n\n\n<li>Pay in capital<\/li>\n\n\n\n<li>Select and buy a suitable currency pair<\/li>\n\n\n\n<li>Alternatively: Also a <a href=\"https:\/\/www.captrader.com\/en\/blog\/short-sale\/\">Short sale<\/a> of the currencies is possible<\/li>\n\n\n\n<li>If you hold a currency pair with an interest rate differential overnight, the rollover rate will be credited to you (or deducted if the interest rate is unfavorable)<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Advantages<\/strong><\/td><td><strong>Disadvantages<\/strong><\/td><\/tr><tr><td>Advantageous interest rate changes can generate additional profits<\/td><td>Risk of loss due to unfavorable changes in interest rates<\/td><\/tr><tr><td>Advantageous exchange rate changes can generate additional profits<\/td><td>Risk of loss due to unfavorable changes in exchange rates<\/td><\/tr><tr><td>Leverage possible to increase profits<\/td><td>Profit (without leverage) rather low<\/td><\/tr><tr><td>You will receive the payment even if the exchange rates do not change<\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">2. carry trade financial products<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One<strong> Financial products such as ETFs or funds offer particularly easy access to carry trades.<\/strong> Different providers pursue a carry trading strategy, often with different focuses.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Investing is particularly easy: all you have to do is create a <a href=\"https:\/\/www.captrader.com\/en\/blog\/open-a-securities-account\/\">Open an account<\/a> and select the right investment product. Before doing so, however, you should review the strategy used and previous successes to ensure that the respective product matches your expectations.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Advantages<\/strong><\/td><td><strong>Disadvantages<\/strong><\/td><\/tr><tr><td>No effort for you, as carry trades are executed automatically or by fund managers<\/td><td>Additional costs&nbsp;<\/td><\/tr><tr><td>Particularly easy access via your broker<\/td><td>Low transparency<\/td><\/tr><tr><td>Often better performance than a lay trader can expect<\/td><td>Low chance of outperformance \/ a professional trader can earn significantly more with carry trades<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion: The carry trade is a popular forex strategy - and not without reason!<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">With a carry trade, traders use <strong>Interest rate differences between individual currencies<\/strong>You borrow capital in one low-interest currency and invest it in another with a higher return.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The maximum profit is the interest rate differential<\/strong>less transaction costs. But the effort involved is also enormous! Much simpler and extremely popular is the so-called. <strong>Currency carry trade. Traders simply hold a currency pair with different interest rates.&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A portion of the interest is credited to them daily. This approach is widespread in forex trading. In combination with leverage, it can generate attractive profits.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, all carry trades are subject to <strong>also various risks<\/strong>Both interest rate changes and fluctuating exchange rates can jeopardize our returns! Traders must therefore not only take short-term <a href=\"https:\/\/www.captrader.com\/en\/blog\/trading-signals\/\">Trading signals<\/a> but also keep an eye on the long-term forecasts for individual currencies.&nbsp;<\/p>","protected":false},"excerpt":{"rendered":"<p>\u201cG\u00fcnstig einkaufen, teuer verkaufen\u201d kann auch bei Zinsen funktionieren! Beim Carry Trade leihen sich H\u00e4ndler Kapital zu einem g\u00fcnstigen Zinssatz, um es anschlie\u00dfend mit h\u00f6herer Rendite einzusetzen. In einer vereinfachten Form handelt es sich bei Carry Trades um eine der beliebtesten Forex-Strategien! Carry Trade Definition und Beispiele&nbsp; Der Begriff Carry Trade beschreibt ein Finanzgesch\u00e4ft mit [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":46286,"menu_order":0,"template":"","blog-kategorie":[842],"class_list":["post-59665","blog","type-blog","status-publish","has-post-thumbnail","hentry","blog-kategorie-forex"],"acf":{"blog_summary":"","blog_faq_schalter":"ja","faq_uberschrift":"FAQ - H\u00e4ufig gestellte Fragen:","blog_faq_loop":[{"blog_faq_question":"Wie funktioniert ein Carry Trade?","blog_faq_answer":"H\u00e4ndler nehmen einen Kredit in einer W\u00e4hrung mit niedrigen Zinsen auf und investieren dieses Geld in einem Land mit h\u00f6heren Zinsen. Besonders einfach gelingt dies im Forex-Bereich, wo Zinsunterschiede automatisch gutgeschrieben werden."},{"blog_faq_question":"Wie investiert man in Carry Trade?","blog_faq_answer":"Investieren Sie in ein W\u00e4hrungspaar mit passenden Zinsen: Short-Position in einer W\u00e4hrung mit niedrigen Zinsen, Long in einer mit hohen Zinsen. Zinsunterschiede werden Ihnen anteilig von Ihrem Broker gutgeschrieben."},{"blog_faq_question":"Gibt es noch Carry Trade?","blog_faq_answer":"Die wohl beliebteste Carry Trade Variante auf Basis des japanischen Yen hat durch steigende Zinsen an Beliebtheit eingeb\u00fc\u00dft. Das Grundkonzept Carry Trade ist aber weiterhin funktionsf\u00e4hig und wird t\u00e4glich tausendfach erfolgreich eingesetzt!"},{"blog_faq_question":"Ist Carry Trade riskant?","blog_faq_answer":"Carry Trades haben gleich mehrere Risiken: Durch Ver\u00e4nderungen der Zinss\u00e4tze oder schwankende Wechselkurse kann sich die erhoffte Rendite drastisch reduzieren oder sogar Verluste entstehen."}]},"_links":{"self":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/blog\/59665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/blog"}],"about":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/types\/blog"}],"author":[{"embeddable":true,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/users\/20"}],"version-history":[{"count":3,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/blog\/59665\/revisions"}],"predecessor-version":[{"id":65912,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/blog\/59665\/revisions\/65912"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/media\/46286"}],"wp:attachment":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/media?parent=59665"}],"wp:term":[{"taxonomy":"blog-kategorie","embeddable":true,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/blog-kategorie?post=59665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}