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(currency) carry trade

Romanian translation: operatiuni valutare cu diferenta de dobanda

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
English term or phrase:(currency) carry trade
Romanian translation:operatiuni valutare cu diferenta de dobanda
Entered by: Magdalena Ciubancan
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11:34 Feb 12, 2007
English to Romanian translations [PRO]
Bus/Financial - Finance (general)
English term or phrase: (currency) carry trade
daca stie cineva echivalentul in romana...
multumesc!
Magdalena Ciubancan
Romania
Local time: 10:50
operatiuni valutare cu diferenta de dobanda
Explanation:
A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates - which can often be substantial, depending on the amount of leverage the investor chooses to use.

Here's an example of a "yen carry trade": let's say a trader borrows 1,000 yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let's assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% (4.5% - 0%), as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration. If the trader in our example uses a common leverage factor of 10:1, then she can stand to make a profit of 45%.

Selected response from:

Andreea Sepi
Germany
Local time: 09:50
Grading comment
Multumesc mult!
4 KudoZ points were awarded for this answer

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Summary of answers provided
3 +1operatiuni valutare cu diferenta de dobanda
Andreea Sepi


  

Answers


26 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5 peer agreement (net): +1
operatiuni valutare cu diferenta de dobanda


Explanation:
A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates - which can often be substantial, depending on the amount of leverage the investor chooses to use.

Here's an example of a "yen carry trade": let's say a trader borrows 1,000 yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let's assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% (4.5% - 0%), as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration. If the trader in our example uses a common leverage factor of 10:1, then she can stand to make a profit of 45%.




    Reference: http://www.investopedia.com/terms/c/currencycarrytrade.asp
Andreea Sepi
Germany
Local time: 09:50
Native speaker of: Native in RomanianRomanian, Native in EnglishEnglish
PRO pts in category: 59
Grading comment
Multumesc mult!

Peer comments on this answer (and responses from the answerer)
agree  tagore: Sugestie : poate ar trebui sa apara si termenul "speculatie" .Eventual prin "valutare" poate ca se restrange sensul (conf. definitiei de la http://financial-dictionary.thefreedictionary.com/) :"Speculatie pe rata dobanzii" ? (asta se urmareste)
2 hrs
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