Hedged carry trade?

Discussion in 'Trading' started by SideShowBob, Sep 25, 2007.

  1. Assuming I wanted to put on a JPY/AUD carry trade, but was concerned about adverse currency moves, couldn't I just buy the appropriate cross-rate futures contract at CME to hedge myself and just keep the interest? Or would the cross-rate futures contract already take the carry trade interest into account in it's pricing?
  2. Already discounts the interest. Unfortunately there is no free lunch.
  3. Not true in prison you get a free lunch ... but you have to be someone's bitch too :eek:
  4. For the sake of accuracy, what you want to trade is AUD/JPY. I don't think you're going to find too many places where you can trade JPY/AUD. The former is the market convention.
  5. Hi makloda

    Can you explain a little bit further how are interests include in pricing of futures contracts refer to above subject ?
    Thanks & happy trading

  6. The futures trade at a discount.